MMG Ltd, a Hong Kong-listed mining and metals company, has received an antitrust warning from the European Commission regarding its proposed acquisition of Anglo American’s Brazilian nickel business. The Commission expressed concerns that the deal could lead to a diversion of nickel supply away from European stainless steel producers, potentially harming the market. This warning highlights the EU’s growing apprehension about its reliance on China for critical minerals essential for defence, technology, and renewable energy, particularly in light of Beijing’s export control measures.
The Commission’s statement of objections indicates that MMG’s acquisition could negatively impact the supply of low-carbon ferronickel, a crucial component for stainless steel production. The EU’s concerns are compounded by the limited alternative sources of supply available to European producers, which could lead to increased prices and reduced resilience in the market.
In response to the warning, MMG has been urged to offer concessions to secure clearance for the deal. However, the remedies proposed during the Commission’s preliminary review were deemed insufficient. The Commission noted that MMG might divert the target’s low-carbon ferronickel supply towards its affiliated stainless steel producers, controlled by the Chinese State-owned Assets Supervision and Administration Commission (SASAC), rather than supplying European manufacturers.
Anglo American expressed disappointment over the EU’s warning, arguing that the acquisition would actually maintain the number of suppliers in the market. A spokesperson for the company stated that the Commission’s assessment overlooked the commercial realities of the market and the significant expansion of ferronickel supply that has occurred in the past year.
MMG has indicated a willingness to guarantee long-term ferronickel supplies to European customers in an effort to alleviate the EU’s concerns. The outcome of this situation remains to be seen as MMG navigates the complexities of regulatory scrutiny while attempting to expand its operations in the critical minerals sector.
