Exclusive-China demands copper supply commitments for Anglo Teck merger approval, sources say

China's State Administration for Market Regulation (SAMR) has requested Anglo American to pledge steady copper concentrate supplies as part of the approval process for the $54 billion merger with Teck Resources, according to sources familiar with the matter. This demand comes as China grapples with a significant copper feedstock shortage, hampering its copper smelting industry, which refines up to 60% of the world's copper cathodes.

Analysts predict that Chinese refined copper output will grow at the slowest pace since at least 2000 this year, as smelters compete for raw materials and face falling prices for byproduct sulphuric acid. China's regulator has sought assurances on copper concentrate supply, including volumes traded through brokers, based on feedback from Chinese smelters negotiating remedies to address their concerns.

As a major consumer of both companies' copper, China holds considerable sway over the merger, historically leveraging its antitrust power to extract behavioral remedies to safeguard its domestic industrial supply. Anglo American stated there is "good progress" towards the deal, while Teck declined to comment on the regulatory process.

The merger has received approval from all other regulators except China, with both companies expecting it to close by March 2027. The deal would control approximately 5% of global copper supply, below the 10%-15% competition threshold. Remedies do not include asset sales at this stage.