Anglo American has sold its nickel business for up to $500mn in cash as it works to radically restructure itself after rebuffing rival BHP’s £39bn takeover attempt last year.
Anglo said on Tuesday that it had agreed to sell its nickel assets, located in Brazil, to MMG Singapore Resources, part of China-backed MMG, for up to $500mn in cash.
It comes a day after the London-listed miner said it would get a $600mn dividend boost ahead of the spin-off of its platinum arm. Anglo American Platinum, the world’s largest platinum company, is to list in London after June and also remain on the Johannesburg Stock Exchange.
Shares in Anglo, which have risen 40 per cent over the past 12 months, rose 0.4 per cent in early trading in London.
Tuesday’s deal is part of Anglo’s radical plan to home in on its copper and iron businesses and offload a range of other units, including its diamonds and platinum arms.
Carmakers need nickel for lithium-ion batteries, while the metal is also used in smartphones and stainless steel.
The nickel industry has been rocked in recent years by a 2022 short squeeze and the rapid ascent of miners in Indonesia that have dramatically reshaped the market. Prices have slumped from a record high in 2022, when nickel briefly rise above $100,000 per tonne before falling back to $16,000 per tonne.
Anglo last year booked an $800mn writedown of its Barro Alto nickel mine in Brazil thanks to falling nickel prices, which have also pushed other operators to close or seek to sell their mines.
Many of the nickel operators in Indonesia are Chinese, with analysts warning that their cheaper cost of producing the metal had made it challenging for western miners to compete.
Duncan Wanblad, Anglo chief executive, said Tuesday’s deal “marks a further important milestone towards simplifying our portfolio to create a more highly valued copper, premium iron ore, and crop nutrients business”.
Cao Liang, chief executive of MMG, said the Brazilian assets were an “important diversification for our business”. MMG’s largest shareholder is China Minmetals, which is a state-owned company.
Anglo said the deal for up to $500mn was comprised of an upfront $350mn in cash, the potential for up to $100mn in semi-annual payments over four years linked to sales above an agreed nickel price and a further $50mn linked to final investment decisions on projects in development.
Standard Chartered was an adviser to Anglo and BMO acted for MMG.
Additional reporting by Harry Dempsey in Tokyo