European Commission warns of impact of MMG's acquisition of Anglo American on competition

Brussels, 16 Sep (KUNA) -- The European Commission warned on Wednesday that the acquisition by Hong Kong-listed mining and metals company MMG of Anglo American's nickel operations in Brazil could restrict competition in the low-carbon ferronickel market and negatively impact stainless steel producers in Europe.

In a statement, the Commission said it had preliminary concerns that the company "may divert the targeted low-carbon ferronickel supplies from European markets to affiliated stainless steel producers controlled by China's State-owned Assets Supervision and Administration Commission (SASAC)."

The Commission clarified that "this diversion of supplies, combined with the limited availability of alternative supply sources, could negatively affect the price of low-carbon ferronickel in the European Economic Area and undermine the resilience of European stainless steel producers."

It noted that it had informed MMG of its preliminary view on the transaction, explaining that its main concern is the potential diversion of supplies away from European markets, which could lead to higher stainless steel production costs in Europe.

The Commission emphasized that its statement of objections does not prejudge the outcome of the comprehensive investigation into the deal and that MMG is entitled to respond to the concerns raised and provide justifications for the transaction.

This move comes as part of the Commission's ongoing investigation, which has lasted nearly a year, into a deal valued at approximately $500 million under which MMG is acquiring two ferronickel production sites and two additional projects in Brazil from Anglo American.

The Commission clarified that MMG is controlled by China Minmetals Corporation, which is itself controlled by SASAC.

During its initial review of the transaction, the Commission had rejected commitments offered by MMG to address competition concerns, deeming them insufficient to adequately remedy those concerns.

(END) ARN / RJ