Anglo American Agrees to $500 Million Nickel Business Sale to MMG
Anglo American, a global mining giant, has announced the sale of its nickel business to MMG Singapore Resources Pte. Ltd, a wholly-owned subsidiary of MMG Limited, for a cash consideration of up to $500 million. This move follows a highly competitive sale process and aligns with Anglo American's strategic goal to simplify its portfolio and focus on core commodities like copper, premium iron ore, and crop nutrients.
Details of the Transaction
The nickel business being sold includes two active ferronickel operations in Brazil, Barro Alto and Codemin, and two promising greenfield development projects, Jacaré and Morro Sem Boné. The cash consideration structure consists of:
• $350 million upfront cash payment upon completion of the deal.
• Up to $100 million in a price-linked earnout, dependent on nickel sales prices exceeding a certain threshold.
• Contingent cash consideration of $50 million tied to the Final Investment Decision for the Jacaré and Morro Sem Boné development projects.
The sale is subject to customary regulatory and competition clearances and is expected to be completed by Q3 2025, with the final proceeds dependent on the earnout and contingent considerations.
Anglo American’s Strategic Portfolio Simplification
Duncan Wanblad, Chief Executive of Anglo American, stated that the sale is a crucial step in simplifying the company’s portfolio. This transaction is part of a broader effort to focus on assets with high potential for growth in copper, premium iron ore, and crop nutrients. It follows Anglo American's earlier moves to divest its steelmaking coal business in November 2024. The combined gross cash proceeds from these transactions are expected to total up to $5.3 billion, reflecting the high quality of the assets being sold.
The sale also aligns with the company’s efforts to create a more resilient and agile business model, unlocking value through a more streamlined asset base that enhances transparency for investors.
MMG’s Acquisition and Strategic Interest
MMG Limited, a global mining company headquartered in Hong Kong, expressed excitement about the acquisition. The company, led by Chief Executive Cao Liang, views the nickel business acquisition as a significant diversification strategy. By acquiring these assets, MMG strengthens its footprint in Latin America and adds a strong, sustainable nickel business to its portfolio.
MMG aims to build on the nickel business’s sustainability achievements and continue its legacy of responsible mining practices, in alignment with the International Council on Mining and Metals (ICMM) principles. The company is particularly keen on the growth potential offered by the greenfield projects Jacaré and Morro Sem Boné.
Nickel Business Overview
The nickel business being sold comprises operating assets in Brazil, including the Barro Alto mine and the Niquelândia mine, alongside the Barro Alto and Codemin ferronickel processing plants. These operations produced 39,400 metric tons of nickel in 2024. In addition to the operating assets, the business includes high-quality growth projects: Jacaré, with approximately 300 million metric tons of mineral resources, and Morro Sem Boné, with a total potential mineralization of 65 million metric tons.
Barro Alto is particularly noteworthy for being the only nickel mine globally certified by the Initiative for Responsible Mining Assurance, achieving the IRMA 75 level of assurance in 2024.
Financial Terms and Contingent Considerations
The agreed total consideration of $500 million includes several components that are contingent on nickel sales performance and future project developments. The price-linked earnout allows for semi-annual payments of up to $100 million, based on nickel prices exceeding an agreed price threshold of $7.1 per pound. Additionally, contingent payments linked to the greenfield projects include:
• $40 million payable upon the Final Investment Decision for the Jacaré project.
• $10 million payable upon the FID for the Morro Sem Boné project.
Key Takeaways:
• Anglo American sells its nickel business to MMG for up to $500 million.
• The deal includes ferronickel operations in Brazil and two high-potential greenfield projects.
• MMG aims to diversify its portfolio and strengthen its presence in Latin America.
• The transaction includes an upfront payment of $350 million and additional earnouts based on nickel prices and project development.
• The nickel business produced 39,400 metric tons of nickel in 2024.
• Barro Alto mine is the only nickel mine globally certified by IRMA at the IRMA 75 level.
• The sale is expected to be completed by Q3 2025, subject to regulatory approvals.
