Anglo American sells off nickel business for US$500m

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UK mining giant Anglo American has sold its Brazilian nickel business for US$500m in the wake of the ongoing supply dominance of Indonesia.

The deal with Chinese-led mining company MMC Singapore Resources follows a series of strategic divestments for some of Anglo American’s largest businesses, including its platinum and steelmaking coal portfolio.

The sale includes two ferronickel operations, Barro Alto and Codemin, and two developing nickel projects, Jacaré and Morro Sem Bone.

Profitability slowdown

Since 2020, Indonesia has emerged as the world’s largest nickel producer, mining around 2.02m t/y in 2023. Market Intelligence firm S&P Global projects that the country will account for 60% of the global nickel market by 2028.

Due to Indonesia’s production oversupply, nickel prices have fallen consistently in the last two years, going from US$28,235 on the London Stock Exchange in January 2023, to US$15,356 at the start of this year.

Anglo’s 2024 financial report shows nickel to be one of its weakest sectors, generating US$92m in earnings before interest, taxes, depreciation, and amortisation (EBITDA). In contrast, its biggest businesses – copper and iron ore – generated US$3.8bn and US$2.6bn, respectively.

Other divestments

Anglo expects to “demerge” its platinum business this June, followed by its De Beers diamond business. It recently wrote down the value of the diamond firm by US$2.9bn, which followed on from a US$1.6bn writedown in 2024.

Late last year, the company sold its steelmaking coal business, based in Australia, to American mining company Peabody Energy. The sales of the nickel and coal businesses alone are expected to generated total cost savings of US$5.3bn.

Duncan Wanblad, CEO of Anglo American, said: “The sale of our nickel business after a highly competitive process marks a further important milestone towards simplifying our portfolio to create a more highly valued copper, premium iron ore, and crop nutrients business.”

The company recently partnered with Chilean mining company Codelco to increase copper production at their adjacent Los Bronces and Andina mines to produce an additional 2.7m t of copper over a 21-year period from 2030.