Anglo American, the global mining group, on Monday night flatly rejected Xstrata’s proposed all-share “merger of equals”, putting itself at odds with several big investors as it labelled the offer from its Anglo-Swiss rival “totally unacceptable”.

Anglo’s blunt rejection of the deal will put pressure on Xstrata either to sweeten its proposal by offering cash or take its case to Anglo’s biggest shareholders. The Anglo board took less than two hours to dismiss unanimously Xstrata’s offer, under which the two companies would combine their assets and create a mining industry giant with a stock market value of about £40bn.