Brazil’s CADE Investigates Anglo American’s $500M Nickel Operations Sale

Brazilian Antitrust Investigation: What's at Stake in Anglo American's $500M Nickel Deal?

Brazil's Administrative Council for Economic Defense (CADE) has launched a formal investigation into Anglo American's proposed $500 million sale of its nickel operations in Brazil. This regulatory scrutiny follows a formal complaint from competitor CoreX Holding, raising significant questions about potential market concentration in Brazil's strategic metals sector.

The investigation represents a critical challenge for Anglo American as it attempts to streamline its global portfolio and focus on core assets. For market observers, the case highlights growing tensions between foreign investment in critical minerals strategy and national economic interests.

Understanding CADE's Probe into the MMG Acquisition

CADE, Brazil's antitrust regulator, has initiated what it officially terms an "Administrative Procedure for Investigating an Act of Economic Concentration" regarding Anglo American's planned nickel operations sale. This formal investigation follows standard procedure when potential competition concerns are raised about major transactions in strategically important sectors.

The investigation was triggered after CoreX Holding, a direct competitor in Brazil's nickel industry challenges, filed a formal complaint challenging the transaction's competitive implications. While CADE has emphasized that opening an investigation doesn't automatically mean the deal will be blocked, it signals significant regulatory interest in the transaction's market impact.

The probe reflects CADE's growing scrutiny of foreign acquisitions in Brazil's natural resource sectors, particularly when involving critical minerals essential for the energy transition. The regulator must balance encouraging foreign investment with protecting competitive market dynamics.

CADE's investigation will likely focus on market share calculations, potential price impact, and whether the transaction could create barriers to entry for other competitors in Brazil's nickel market.

What Prompted the Investigation?

The antitrust investigation stems from a formal complaint filed by CoreX Holding, which operates as a direct competitor to Anglo American in Brazil's nickel market. According to public statements from CADE, the complaint specifically raised concerns about potential market concentration resulting from the transaction.

The timing of the complaint is significant, coming approximately six months after the initial deal announcement in February 2025. This suggests CoreX may have been evaluating its strategic options before deciding to challenge the transaction formally.

Market analysts note that CoreX's complaint likely centers on concerns that the deal would significantly strengthen MMG's position in Latin American nickel markets, potentially creating competitive disadvantages for other players. The complaint may also address concerns about vertical integration, supply chain control, and pricing power in the ferronickel market.

Brazilian competition law gives CADE broad authority to investigate transactions that could potentially harm competition, even after deals have been announced but before they've been finalized.

Industry experts point out that CADE's willingness to open a formal investigation indicates the regulator found sufficient merit in CoreX's complaint to warrant deeper scrutiny.

The Deal Structure: Breaking Down the $500M Transaction

The proposed sale, announced in February 2025, involves Anglo American divesting its Brazilian nickel assets to MMG Singapore Resources, a subsidiary of Hong Kong-listed MMG Limited. The transaction is structured with significant complexity:

• $350 million upfront payment upon closing
• Up to $150 million in contingent consideration based on production performance and nickel price benchmarks
• Transfer of the Barro Alto and Codemin (Niquelândia) operations, including mining rights and processing facilities
• Approximately 40,000 tonnes of annual ferronickel production capacity
• Over 150 million tonnes of nickel resources across both operations
• Ownership transfer of related infrastructure assets including power generation facilities

The transaction represents one of the most significant nickel asset sales in South America in recent years, with the combined operations accounting for approximately 25% of Brazil's nickel production capacity.

From a financial perspective, the deal would give MMG immediate production capacity in a region where nickel development projects typically require 5-7 years to reach commercial production. The contingent payment structure also protects Anglo American's interests if nickel prices rise substantially following the transaction.

Why Is Anglo American Selling Its Nickel Business?

Anglo American's decision to divest its Brazilian nickel operations aligns with a broader strategic restructuring following its successful defense against BHP's unsolicited $39 billion takeover attempt in 2024. This corporate reorganization represents a significant pivot for the diversified mining giant.

The company has publicly committed to focusing its portfolio primarily on copper and premium iron ore assets, which management views as offering superior long-term growth potential. Anglo American's CEO has emphasized the company's intention to:

• Concentrate capital allocation on tier-one copper projects in Chile and Peru
• Expand iron ore operations in Brazil and South Africa
• Reduce exposure to commodities with more volatile demand profiles
• Streamline the corporate structure to enhance shareholder returns
• Reduce overall operational footprint across multiple jurisdictions

The nickel divestiture follows Anglo American's May 2025 demerger of its platinum group metals business, creating a separate listed entity. The company has also publicly acknowledged it's evaluating strategic alternatives for its underperforming De Beers diamond division, including potential sale or partial divestiture.

Industry analysts note that while nickel demand is projected to grow substantially due to energy transition challenges, Anglo American's Brazilian operations are primarily geared toward producing ferronickel for the stainless steel industry rather than battery-grade materials. This positioning makes these assets less strategic in Anglo's long-term portfolio.

Who Is Challenging the Deal?

CoreX Holding has emerged as the primary challenger to the transaction. Founded by Turkish billionaire Robert Yildirim, CoreX has established a growing presence in Latin America's metals sector over the past decade.

The company brings significant competitive interests to its challenge:

• CoreX operates several nickel processing facilities in neighboring countries
• The company has been actively pursuing acquisition opportunities in Brazil's metals sector
• CoreX previously attempted to acquire the same Anglo American assets in 2023
• The company has invested over $800 million in Latin American mining operations since 2018

Robert Yildirim, who built his fortune in shipping and ports before expanding into metals, has been vocal about establishing CoreX as a dominant player in specialty metals across emerging markets. Industry observers note that blocking MMG's acquisition could potentially create an opportunity for CoreX to make a competing bid.

Beyond its commercial interests, CoreX has positioned its challenge as protecting competition in Brazil's strategic minerals sector. The company has argued that allowing Chinese-backed MMG to acquire these assets would create unhealthy market concentration and potentially impact metal pricing for Brazilian industrial customers.

International Dimensions: Beyond Brazil's Borders

The investigation has implications far beyond Brazil's borders, with international stakeholders increasingly vocal about their concerns. Several aspects elevate this case to international significance:

• The American Iron and Steel Institute has urged U.S. government attention to the transaction, citing concerns about critical mineral supply chains
• European steel producers have expressed anxiety about further concentration in global ferronickel markets
• The transaction represents another example of Chinese investment in Latin American natural resources, continuing a decades-long trend
• MMG's connections to China Minmetals Corporation raise questions about government influence in strategic mineral acquisitions

The geopolitical dimension cannot be overlooked. As nations worldwide race to secure critical mineral supplies for energy transition technologies, transactions involving nickel assets attract heightened scrutiny. Several governments have designated nickel a "critical mineral" essential for national security and economic resilience.

Industry experts note that while MMG is publicly listed in Hong Kong, its connections to Chinese state-owned enterprises create additional complexity for regulators weighing the transaction's broader implications. The case highlights the increasingly blurred lines between commercial transactions and national strategic interests in the critical minerals sector.

"The nickel market has transformed from a relatively obscure metal market to one of significant geopolitical importance. Every major transaction now carries implications for energy security, industrial policy, and national competitiveness."

– Global Resources Policy Institute, July 2025 report on critical minerals transactions

The Strategic Importance of Brazilian Nickel

Brazil's nickel resources hold particular significance in global supply chains, making this transaction especially noteworthy from both economic and strategic perspectives.

Brazil currently ranks among the world's top ten nickel producers, with its resources becoming increasingly strategic due to several factors:

• Essential input for electric vehicle battery production, with demand projected to triple by 2030
• Critical component in stainless steel manufacturing, where Brazil is a significant regional supplier
• Growing importance in the green energy transition, including energy storage applications
• Strategic value in diversifying global supply away from dominant producers like Indonesia and the Philippines

Brazilian nickel operations are particularly valuable due to their:

• Relatively low carbon footprint compared to coal-powered operations in some Asian countries
• Established infrastructure and skilled workforce
• Proximity to major industrial centers in North and South America
• Stable regulatory environment compared to some other nickel-producing regions

The assets in question include some of Brazil's most productive nickel operations, with the Barro Alto facility having undergone a significant $1.9 billion modernization in 2018. This enhanced the facility's production capacity and energy efficiency, making it one of South America's most advanced ferronickel operations.

Industry analysts note that control of these assets provides significant leverage in the regional metals market, particularly for downstream industrial applications including stainless steel, specialty alloys, and potentially battery materials.

What Are the Potential Outcomes?

The investigation creates several possible scenarios for the transaction, each with distinct implications for the companies involved and Brazil's nickel market:

Approval Without Conditions

CADE could determine the transaction poses no significant competitive threats and approve it without modifications. This outcome would allow Anglo American and MMG to proceed with the sale as structured, likely completing the transaction by Q1 2026.

Approval With Remedies

The regulator might approve the deal subject to specific conditions, which could include:

• Divestiture requirements for certain portions of the acquired assets
• Operational restrictions or market access guarantees for competitors
• Price commitments for domestic Brazilian customers
• Technology transfer or licensing requirements
• Commitments regarding future investment levels or production volumes

Extended Review Period

CADE could determine it needs additional time to fully evaluate the competitive implications, extending the investigation timeline. This would delay closing but keep the transaction viable.

Rejection

In the most severe scenario, CADE could block the transaction entirely if it determines the competitive concerns cannot be adequately addressed through remedies. This would force Anglo American to seek alternative divestiture options.

Alternative Bidders

The regulatory scrutiny could potentially open the door for alternative bidders, including CoreX, to make competing offers for the assets if the MMG transaction faces significant obstacles.

Market analysts note that extended regulatory uncertainty typically disadvantages the selling company, as the delay can impact operational planning, employee retention, and capital investment at the affected operations.

Anglo American's Divestment Challenges

The CADE investigation represents just one of several hurdles Anglo American has faced in its asset disposal program. The company has encountered significant challenges in executing its strategic restructuring plan:

• Peabody Energy recently withdrew from its planned $3.2 billion acquisition of Anglo's steelmaking coal assets in Australia
• The coal deal collapsed after an ignition event at the Moranbah North Mine created uncertainty about resuming sustainable longwall production
• Operations at Moranbah North have been suspended for approximately five months, significantly impacting production forecasts
• The failed coal transaction has forced Anglo American to evaluate alternative divestiture approaches for these assets

These setbacks highlight the challenges in executing large-scale corporate restructuring in the mining industry, where operational incidents can significantly impact asset valuations and transaction timelines.

Industry observers note that Anglo American faces increasing pressure to successfully complete its strategic pivot, with activist investors pushing for faster portfolio rationalization and enhanced shareholder returns. The nickel asset sale represents a critical component of this broader corporate transformation.

Market Implications of Regulatory Scrutiny

CADE's investigation raises broader questions about regulatory approaches to critical mineral transactions globally. The case highlights several emerging trends:

1. Heightened scrutiny of foreign investments in strategic sectors, particularly those involving critical minerals essential for energy transition technologies

2. Increasing focus on competitive dynamics in concentrated mining sectors, where relatively few players control significant portions of global production

3. Growing tension between encouraging foreign investment and protecting national interests in resource-rich countries

4. Evolving definitions of "national security" to encompass mineral supply chains critical for industrial competitiveness

5. Regulators' willingness to intervene in transactions that could impact downstream industrial customers

For mining companies, this regulatory environment creates additional complexity when planning portfolio optimizations or acquisitions. Transactions that might have proceeded smoothly five years ago now face more rigorous evaluation.

Industry experts note that this trend extends beyond Brazil, with similar scrutiny emerging in jurisdictions worldwide as governments recognize the strategic importance of critical mineral assets in the energy transition.

What's Next in the Process?

As the investigation proceeds, several key developments will shape the outcome:

• CADE has not publicly disclosed a specific timeline for completing its review, but similar investigations typically require 6-9 months
• Anglo American and MMG may propose remedies to address competitive concerns, potentially including asset divestitures or operational commitments
• CoreX and other market participants will have opportunities to provide additional evidence to support their competitive concerns
• Industry associations representing nickel consumers in Brazil may weigh in on the potential market impact
• International regulatory bodies from jurisdictions where the companies operate could express interest in the transaction

The companies have several options as they navigate this process:

• Submit additional economic analyses demonstrating limited competitive impact
• Propose structural or behavioral remedies to address specific concerns
• Modify the transaction structure to reduce competitive implications
• Engage with other stakeholders to build broader support for the transaction

Industry analysts note that Anglo American faces particular pressure to resolve the situation expeditiously, as prolonged uncertainty could impact the operational performance of the Brazilian nickel assets and potentially reduce their value.

Key Considerations for Industry Watchers

For those following this case and similar transactions in the mining sector, several factors warrant particular attention:

• The evolving definition of market concentration in globally traded commodities where competition occurs across borders
• The balance between encouraging foreign investment and protecting domestic interests in resource-rich countries
• The increasing complexity of executing portfolio optimizations in the current regulatory environment
• The potential implications for other critical mineral transactions currently being contemplated

The case also raises important questions about how regulators should evaluate transactions involving Chinese or Chinese-backed entities in strategic sectors. This question extends beyond mining to other industries considered vital for economic security and technological leadership.

As the global rush for critical minerals accelerates, regulatory approaches to these transactions will continue evolving, potentially creating new challenges for mining consolidation trends as companies seek to optimize their asset portfolios.

The Broader Context: Critical Minerals in a Changing World

The CADE investigating Anglo American nickel operations sale in Brazil reflects broader tensions surrounding critical mineral supply chains in an era of energy transition and geopolitical competition. These dynamics are reshaping how governments, companies, and investors approach mineral assets:

• Nations are increasingly treating critical minerals as strategic assets rather than purely commercial commodities
• Supply chain resilience and sovereignty concerns are influencing regulatory decisions
• Mining companies must navigate more complex stakeholder considerations beyond traditional financial metrics
• Investors are paying greater attention to global market challenges when evaluating mining assets

For Brazil specifically, the case represents an important test of how the country balances attracting foreign investment in its natural resources with protecting competitive markets and national interests. According to a Reuters report, the outcome will likely influence how future critical mineral transactions are approached by both companies and regulators.

Industry observers should watch this case closely as an indicator of emerging trends in global critical mineral governance and competition policy. The principles established could influence similar cases in jurisdictions worldwide.

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