China's antitrust regulator has asked Anglo American to guarantee steady copper concentrate supply as a condition for clearing its $54 billion merger with Teck Resources, three people familiar with the matter say. The demand reflects China's worst feedstock shortage in decades at smelters that refine up to 60% of the world's copper cathodes.
China's State Administration for Market Regulation (SAMR) has asked Anglo American to commit to supplying the country with a steady flow of copper concentrate before it signs off on the company's proposed $54 billion merger with Teck Resources, three people aware of the development told Reuters. SAMR is the last regulator still reviewing the deal.
Smelters squeeze the regulator's hand
China's vast smelting industry refines up to 60% of the world's copper cathodes but faces its worst feedstock shortage in decades. As a result, Chinese refined copper output is expected to grow at its slowest pace since at least 2000 this year, analysts said, as smelters compete for raw material and falling prices for byproduct sulphuric acid squeeze profitability.
SAMR has asked for assurances on concentrate supply, including volumes sold through traders, the people said, declining to be named given the confidential nature of the talks. The regulator has received feedback from Chinese smelters and is now negotiating remedies based on their concerns, one person said. As a major consumer of both companies' copper, China holds effective veto power over the merger and has historically used its antitrust authority over megadeals to extract behavioural remedies protecting its domestic industry.
Teck declined to comment on regulatory processes, while an Anglo American spokesperson said the company is "working constructively with the Chinese regulator, SAMR, through its structured review process."
Western smelters and pricing at stake
Analysts said cutting Anglo Teck's unrefined volumes off the open market could hasten the closure of some Western processing facilities already under cost pressure. It could also push the industry toward index-linked spot pricing and away from traditional annual benchmarks, they said. The bulk of Anglo American's copper output from Peru and Chile currently sells as unrefined concentrate to international buyers, including Chinese, Japanese, and European custom smelters.
Deal nears the finish line
Announced in 2025, the Anglo Teck merger has cleared every regulator except China, and both companies expect it to close by March 2027. The combined group would control around 5% of global commodity supply in copper, below competition thresholds that exceed 10% to 15%. The remedies sought so far do not include asset sales, the people said.
Anglo's separate sale of its nickel assets to China's MMG illustrates the complexity of navigating multiple jurisdictions: the European Commission has issued an antitrust warning over concerns MMG may divert ferronickel supply away from Europe, and MMG is proposing long-term European supply commitments in response.
Resource-hungry nations are increasingly using merger reviews to secure supply of materials essential for the clean energy transition. Executives at Glencore, Anglo American, and Rio Tinto say antitrust reviews and national-interest considerations are becoming more prominent factors in deals involving copper and other critical minerals.
Source: Investing.com
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