UK-based mining giant Anglo American has been approached by rival BHP about a potential £31bn takeover.

Anglo American told the BBC that the proposal is currently being reviewed by its board of directors.

BHP confirmed the proposal which it said would give it access to "Anglo American's world class copper assets".

If the deal goes ahead it would be one of the mining industry's biggest mergers in many years.

Anglo American - which operates mines in countries like Chile, South Africa, Brazil and Australia - had a stock market value of around £29bn before the approach was made public.

Australian-based BHP is the world’s largest publicly listed mining company with a market valuation of about A$229bn (£119.5bn).

The move comes a year after BHP bought copper producer Oz Minerals for A$9.6bn.

If finalised, the deal would increase BHP's access to copper, through Anglo American's operations in South America.

The price of copper has risen on the global markets by more than 15% this year.

Prices have jumped due to the metal being in high demand as the shift to clean energy accelerates.

"Anglo American's existing footprint in the copper industry is ultimately what lured a mining giant such as BHP," said Tim Waterer, chief market analyst at financial services firm KCM Trade.

Anglo American's share price had fallen by almost 10% in the last year, which could have helped make it an even more attractive takeover target, Mr Waterer added.

Susannah Streeter from investment platform Hargreaves Lansdown said BHP's takeover plan "will send a fresh chill through the City of London". Anglo American is listed on the London Stock Exchange. BHP used to be listed in both the UK and Australia but in 2022 shifted its primary listing to Sydney.

"There are concerns that if the deal goes through it could be the tip of the iceberg and more giants could leave the exchange."

Anglo American's share price jumped by more than 12% to £24.86 in early trading on Thursday.

BHP's proposal makes any offer conditional on Anglo American giving up its stakes in platinum and iron ore operations in South Africa.

Under the UK's merger and acquisition rules, BHP has until the close of business on 22 May to make a formal offer for Anglo American.