PARIS (Reuters) - France’s Eramet is close to a deal to sell Brown Europe, an alloys supplier to the aeronautics industry, to French investment fund Ace as it focuses on upstream mining activities, two people familiar with the matter said. Based in southwest France, Brown Europe is a relatively small business, with annual sales of about 20 million euros ($24 million), but industry experts say the high-tech firm occupies a strategic position in France’s complex aerospace supply chain. The sale of Brown Europe to Ace Capital Partners, formerly Ace Management, is expected to close next month, one of the people said. The transaction price was not immediately clear. Eramet and Ace declined comment. The sale of Brown Europe marks an opening step in widely watched plans by France’s last major mining company, controlled by the Duval metals family together with the French state, to focus on mining and scale back downstream industrial activities. It is being carried out separately from talks to sell a larger Eramet alloys subsidiary, Aubert & Duval, to a consortium also including Ace, partnered with aerospace giants Airbus and Safran. Those talks appear to have slowed for now amid disagreements over price, industry sources said. Eramet’s reorganisation is the hallmark of Chief Executive Christel Bories, who last month won board approval for a second term following a tussle with the Duval family, Eramet’s largest shareholder. Eramet has said it may also divest Erasteel, another business in its alloys division. Large aerospace groups and their investors are increasingly focusing on the solidity of small but potentially critical links in a supply chain severely weakened by the coronavirus crisis. Brown Europe specialises in wire-drawing, or reducing the cross-section of high-performance alloys used in aerospace. Aubert & Duval’s advanced superalloys are used in engines for France’s Rafale fighter and the LEAP commercial engine, co-produced for Boeing and Airbus by Safran and General Electric. Ace, part of investment firm Tikehau Capital, has been involved in a government-backed effort to help French suppliers in the face of the travel slump caused by COVID-19. Reporting by Gus Trompiz; Editing by Chris Reese, Tim Hepher and Steve Orlofsky Our Standards: The Thomson Reuters Trust Principles.