By Foo Yun Chee
BRUSSELS (Reuters) -Hong Kong-listed mining and metals company MMG’s plan to buy Anglo American’s Brazilian nickel business could enable MMG to divert ferronickel from Europe and hurt European stainless steel production, EU antitrust regulators said on Tuesday.
The warning from the European Commission, which acts as the EU competition enforcer, came as it opened an in-depth investigation into the deal, amid global concerns about the supply of key minerals and China’s dominance.
Anglo American announced the sale in February, which includes two ferronickel and two greenfield projects in Brazil.
“Ferronickel is a key input for European producers to manufacture high-quality, low-emission stainless steel at competitive prices, which is critical for many sectors,” EU antitrust chief Teresa Ribera said in a statement.
“Our investigation aims to verify whether this concentration could jeopardise continued and reliable access in Europe to this important resource,” she said.
The Commission said a diversion of ferronickel supply, together with limited alternative supply sources, could adversely affect the price and quality of a substantial share of European stainless steel production, affecting the ability to compete globally.
MMG and Anglo American said they were committed to the deal. They said their earlier offer for Anglo American to buy ferronickel from MMG for resale in Europe for up to 10 years to ease regulatory concerns was an optimal outcome for customers.
The Commission will decide by March 20 whether to clear or block the deal, which can be extended if the companies submit fresh concessions.
(Reporting by Foo Yun Chee; Editing by Sharon Singleton)
