Company announced in May of last year that it would simplify its activities and focus on copper, iron ore, and fertilizers
02/19/2025
The sale of Anglo American’s nickel operations in Brazil to China’s MMG, in a deal valued at up to $500 million, marks the British conglomerate’s exit from this market in the country. This move reflects a strategic shift by major mining companies in response to global market oversupply and China’s bet on the future of the metal.
The announcement, made on Tuesday (18th), involves two operational ferronickel assets in Goiás, Barro Alto and Codemin (Niquelândia), as well as two potential future development projects, Morro Sem Boné (Mato Grosso) and Jacaré (Pará).
Amid the challenging conditions for nickel, Anglo American disclosed in May last year that it would streamline its operations to focus on copper, iron ore, and fertilizers, aiming to unlock value from its businesses. This reorganization followed the company’s rejection of several acquisition offers from rival BHP.
In September, the company’s chief executive in Brazil, Ana Sanches, had already indicated that the assets would be presented to a range of companies globally. At the time, she also mentioned that the sales might include exploratory assets in other locations, depending on the progress of negotiations.
“With Anglo American’s global portfolio restructuring, the Minas-Rio System is becoming even more strategic,” Ms. Sanches said in a statement on Tuesday. “We will continue to focus on sustainable development in Brazil, with medium and long-term investments in our premium iron ore business, and the potential to significantly increase our production, especially following the agreement signed with Vale to incorporate the mineral resources of Serra da Serpentina.”
Nickel producers have faced challenges in maintaining profitability due to price volatility and increased competition from Indonesia’s oversupply, where Chinese miners operate at lower costs. Since 2022, the market has been disrupted by a steep drop in prices and the rapid expansion of miners in Indonesia, significantly reshaping the competitive landscape.
For Kwasi Ampofo, head of metals and mining at BloombergNEF, price is the primary determinant for capital investments in mining. According to him, divestment is likely to continue unless there is a price recovery, which would depend on significant production cuts.
Several companies are reevaluating their positions in the nickel market. Recently, Vale announced that its subsidiary Vale Base Metals has initiated a strategic review to “explore and evaluate a range of alternatives, including the potential sale, of its mining and exploration assets in Thompson, Manitoba,” in Canada.
Rafael Marchi, managing partner of A&M Infra de Mineração, points out that in recent years, the price of nickel has dropped by 30%, impacted by global oversupply and decreased demand. This scenario may influence strategic decisions by companies, such as the potential sale of less profitable assets.
This reorganization of nickel assets reflects changes in the global metals market and the geopolitical competition for essential resources for energy transition. The acquisition of the assets by MMG Limited, a company with significant Chinese involvement, underscores Beijing’s strategy to secure control over essential mineral resources.
China has been directing substantial investments to Indonesia, a country that has become central to global nickel production. In addition to direct acquisitions, Asia’s largest economy has forged strategic partnerships with Brazilian companies. Vale, for instance, has established agreements with China Baowu Steel Group and Shandong Xinhai Technology to develop nickel production projects in Indonesia.
¨*By Robson Rodrigues e Stella Fontes — São Paulo
Source: Valor International