China’s antitrust regulator has asked Anglo American to provide assurances that the combined company resulting from its proposed merger with Teck Resources would maintain a steady supply of copper concentrate to China, according to Reuters, citing three people familiar with the matter.
The request forms part of China’s regulatory review of the proposed US$54 billion Anglo–Teck merger. Reuters reported that the supply assurances are being sought as a condition for Chinese approval of the transaction, although the precise terms of any undertaking have not been publicly disclosed.
The discussions come as Chinese copper smelters face severe constraints in concentrate availability. China accounts for around 60% of global refined copper cathode production, making its smelting industry heavily dependent on reliable supplies of copper concentrate.
Rapid growth in global smelting capacity has outpaced growth in mined copper supply, contributing to a prolonged tightening in the concentrate market. Reuters reported that China’s current feedstock shortage is among the most severe experienced by its copper smelting sector in decades.
Anglo American said it is working constructively with China’s State Administration for Market Regulation as the review progresses. No fixed concentrate volumes or binding supply arrangement have been publicly confirmed.
The proposed merger would combine significant copper assets held by Anglo American and Teck, increasing the enlarged group’s importance in global mined copper supply. Reuters estimates that the combined company would account for approximately 5% of global copper supply.
China’s reported request for copper concentrate supply assurances highlights the importance of feedstock availability to the country’s smelting industry amid a prolonged concentrate shortage. The request indicates that copper concentrate supply security has become an important consideration in China’s review of the Anglo–Teck merger. Attention will now turn to whether the parties agree to any formal supply commitments and whether those conditions affect the timing or structure of the merger approval process.
