EU Set to Warn MMG Over Anglo American’s Brazilian Nickel Acquisition
EU Regulatory Concerns and Implications for Nickel Acquisition
By Foo Yun Chee
Background of the Acquisition
BRUSSELS, Sept 8 (Reuters) - EU regulators are preparing to warn Hong Kong-listed mining and metals company MMG over its plan to buy Anglo American's Brazilian nickel business because of competition concerns, three people familiar with the matter said.
EU's Dependence on Critical Minerals
The step reflects mounting European Union concern about the bloc's reliance on China for critical minerals vital to defence, technology and renewable energy and Beijing's use of export control measures on critical mineral supplies.
Regulatory Process and Potential Outcomes
Statement of Objections by the European Commission
The European Commission, which acts as the EU competition enforcer, is preparing to send out this month what is known as a statement of objections or a charge sheet, setting out the concerns that will need to be addressed for the deal to be cleared, the people said. They spoke on condition of anonymity because the matter is not yet public.
Possible Remedies and Likelihood
MMG could stave off the charge sheet by offering remedies, but this is regarded as unlikely, one of the people said.
Responses from Involved Parties
Official Comments
The EU antitrust watchdog and MMG declined to comment. Anglo American reiterated comments issued two weeks ago.
Anglo American's Statement
"The evidence we've provided demonstrates that this transaction poses no competition concerns to the EU market and should be approved unconditionally," it said in a statement to Reuters.
"Over the past year, the market has benefited from a significant structural expansion of FeNi supply from a number of producers, whilst European customers have shown how readily they can switch between their various suppliers," it said.
Potential Impact on European Market
The Commission in November said the deal could enable MMG to divert ferronickel from Europe and undermine the competitiveness of European stainless steel production.
(Reporting by Foo Yun Chee; editing by Barbara Lewis and Tomasz Janowski)