China’s foreign minister meets Brazil president’s chief advisor

China’s foreign minister meets Brazil president’s chief advisor

China’s foreign minister, Wang Yi, recently met with Brazil’s President Luiz Inácio Lula da Silva’s chief advisor, Ricardo Kotscho, to discuss a range of strategic and economic issues. The meeting comes at a time when Brazil is emerging as a significant player in the global nickel market and as a major destination for Chinese investments. This meeting underscores the growing geopolitical and economic ties between the two nations, which could have significant implications for the nickel market.

Regulatory Scrutiny and Market Dynamics

Brazil’s competition watchdog, CADE, has launched a formal investigation into the $500 million sale of Anglo American’s Brazilian nickel operations to MMG, a subsidiary of China’s state-owned Minmetals Corp. [1]. The probe, which opened an Administrative Procedure for Investigating an Act of Economic Concentration, highlights the heightened regulatory caution surrounding the deal. Analysts warn that the sale could consolidate MMG’s regional dominance, potentially disadvantaging smaller players and industrial customers [1].

China’s Dominance and Global Supply Chain Vulnerabilities

China’s control over the global nickel supply chain has deepened, with the country controlling 75% of Indonesia’s refining capacity and 80% of battery-grade nickel output in the region [1]. The Anglo American-MMG deal adds to this dominance, as MMG gains its first operating nickel asset in Brazil. This acquisition aligns with China’s long-term strategy to secure access to critical resources [1].

The concentration of nickel production in China and Indonesia poses significant risks. Over 70% of global nickel sulfate production occurs in China, relying on intermediates from Indonesian sources [1]. Export restrictions, geopolitical tensions, or operational disruptions in either country could trigger price volatility, with a 40-50% spike in battery pack prices modeled in case of supply shocks [1].

Geopolitical Strategies: U.S. and EU Policy Responses

The U.S. and EU have accelerated efforts to diversify critical mineral supply chains, recognizing their reliance on China. A 2025 Framework Agreement between the two regions emphasizes reducing trade imbalances while fostering cooperation in defense and energy transition minerals [1]. The EU’s Critical Raw Minerals Act and ReArm Europe Plan allocate €800 billion to secure resources like rare earth elements, cobalt, and tungsten [1]. Meanwhile, the U.S. Inflation Reduction Act and Minerals Security Partnership aim to bolster domestic production and regional alliances, though implementation challenges persist [1].

Investment Risks and Opportunities

For investors, the Anglo American-MMG transaction exemplifies the dual-edged nature of nickel markets. Regulatory delays in Brazil could disrupt Anglo American’s restructuring plans, compounding recent setbacks like the failed $3.8 billion coal sale to Peabody Energy [1]. However, the deal underscores the growing importance of nickel in the EV and stainless steel industries, sectors projected to drive demand growth.

Opportunities lie in companies diversifying supply chains or leveraging geopolitical incentives. Firms securing nickel from regions outside China-Indonesia dominance—such as Canada, Australia, or the Democratic Republic of Congo—may benefit from policy-driven subsidies. Conversely, investors in Chinese-controlled assets face exposure to regulatory risks and market concentration, as seen in the CADE probe and U.S. scrutiny [1].

Conclusion

The meeting between China’s foreign minister and Brazil’s president’s chief advisor highlights the strategic importance of Brazil in the global nickel market. Regulatory scrutiny in Brazil, China’s supply chain dominance, and U.S.-EU policy shifts all point to a landscape where geopolitical considerations outweigh pure market dynamics. For investors, the path forward requires balancing short-term volatility with long-term trends: the energy transition’s demand for nickel will persist, but its supply chain will remain a battleground for economic and national security interests.

References

[1] https://www.ainvest.com/news/strategic-risks-opportunities-global-nickel-markets-regulatory-scrutiny-anglo-american-500m-brazil-sale-2509/
[2] https://www.reuters.com/business/autos-transportation/chinese-investment-doubles-brazil-jumping-no-3-destination-2025-09-04/