US Trade Representative (USTR) Jamieson Greer asked Brazil to review the sale of Anglo American’s nickel mines to a Chinese state-controlled miner in exchange for tariff relief, two people familiar with the negotiations told the South China Morning Post.
Washington made the request during talks to lift the 50 per cent tariffs US President Donald Trump imposed on Brazilian goods last year.
First reported by Brazilian newspaper O Estado de S. Paulo and CNN Brazil on Thursday, the proposal would have given Washington advance notice of mining asset sales before those deals closed, subjected transactions involving rare earths to US review, and opened a window for American companies to buy the assets before any sale won approval.
Greer also asked Brasilia to limit investment by “non-market actors” and foreign entities of concern in mining, refining and other critical industrial sectors. Brazilian officials read the phrase as a reference to China, the country’s largest trading partner and a growing source of investment in its mining sector.
Officials at the foreign ministry rejected the terms and said Brazil applied the same rules to foreign investors regardless of where their capital came from. They also rejected a second and shorter proposal in January that repeated several of the demands.
The US embassy in Brasilia and the USTR could not be immediately reached for comment.
The American Iron and Steel Institute had asked Greer to intervene months earlier.
Lobby group letter warns of China’s ‘direct influence’ if sale goes ahead
In a letter sent in August last year, the lobby group warned that if the sale succeeded “China would gain direct influence over a substantial portion of Brazil’s nickel reserves, in addition to its dominant position in Indonesian production”, and urged its office to press Brasilia to explore alternatives that “would preserve market-oriented ownership of these strategic nickel assets”.
Kevin Dempsey, the institute’s Chief Executive, filed the letter in the public docket of the Section 301 investigation into Brazil. That investigation covered digital payments, tariffs, intellectual property, ethanol access and deforestation, but nickel was not on the list.
Anglo American agreed in February last year to sell the business to a Singapore subsidiary of MMG for up to US$500 million, with US$350 million payable on completion and the rest tied to nickel prices and a final investment decision on new projects.
The sale was part of a restructuring the London-listed miner launched after it fended off a takeover approach from BHP.
The assets include the Barro Alto and Codemin ferronickel operations in Goias state, which together produced 39,700 tonnes of nickel contained in ferronickel last year, and undeveloped projects at Jacare in Para and Morro Sem Bone in Mato Grosso.
MMG and its parent China Minmetals are controlled by the State-owned Assets Supervision and Administration Commission.
China does not produce ferronickel and instead relies on nickel pig iron, a cheaper, lower-grade substitute smelted mostly in Indonesia from ore that Chinese companies control. Brazilian ferronickel has a higher nickel content and, because the mines run on a lower carbon footprint, European mills have struggled to source it elsewhere.
Brazil’s antitrust authority, known as Cade, opened an inquiry in August last year after a complaint from CoreX Holding, a Netherlands-registered group controlled by Turkish billionaire Robert Yuksel Yildirim, which said it had offered US$900 million for the same assets and took the same objection to regulators in Brussels.
Regulators in Brasilia examined whether the transaction should have been notified in advance, which carried a fine of up to 60 million reais (US$11.5 million) for Anglo American, and Cade’s investigative arm shelved the case.
Anglo American said MMG submitted the strongest offer after weighing guarantees, operating record, and long-term management capacity alongside price.
European Commission’s in-depth investigation into deal
The European Commission opened an in-depth investigation last November and sent MMG a statement of objections on Wednesday, warning that the miner could redirect low-carbon ferronickel towards affiliated Chinese steelmakers and away from European producers.
The Commission said such a diversion “could adversely affect the price of low-carbon ferronickel” and the resilience of European stainless steel producers.
MMG rejected the assessment, offered guarantees to European customers and said it would supply at least the volumes Anglo American currently delivers. The Commission has until November 30 to decide.
Brazil and the United States resumed talks on August 31 after months without formal negotiations, and Brazil’s minister of development, industry and trade, Marcio Elias Rosa, is due to meet Greer in the US on the sidelines of a G20 meeting later this month.
Until then, two rounds of US tariffs remain in force, reaching 37.5 per cent when combined and covering about 23 per cent of Brazilian exports to the American market, though rare earths are already exempt. -- SOUTH CHINA MORNING POST
