China Demands Copper Supply Commitments for Anglo Teck Merger Approval
China's antitrust regulator has demanded that Anglo American commit to supplying copper concentrate as a condition for approving its proposed $54 billion merger with Canada's Teck Resources. The country needs steady copper supplies due to a feedstock shortage in its vast smelting industry, which refines 60% of the world's copper cathodes.
The State Administration for Market Regulation has asked Anglo American to provide assurances on copper concentrate supply volumes sold through traders, according to three people aware of the development. This reflects China's struggle to feed its industrial sector amid falling prices for byproduct sulphuric acid and slow growth in refined copper output.
A combination of Anglo American and Teck would control around 5% of global copper supply, below competition thresholds exceeding 10-15%. However, China has historically leveraged its antitrust power to extract strict 'behavioural remedies' from megadeals, including asset sales. In this case, the regulator is negotiating remedies with smelters, and Anglo American says there's good progress towards deal completion.