China-backed mining company MMG has called on European Union regulators to approve its $500 million acquisition of Anglo American’s Brazilian nickel assets, amid concerns that the deal could increase Beijing’s influence over a key material for Europe’s steel industry. The transaction, announced last year, is currently under scrutiny by the European Commission, which is expected to issue a formal warning in the coming week, according to sources familiar with the matter. The Commission has declined to comment.
The EU investigation is seen as a significant test of Brussels’ willingness to shield its industries from potential economic coercion linked to geopolitical tensions with China. European officials are reportedly worried that the sale could restrict supplies of ferronickel, an essential component for stainless steel production, thereby undermining the competitiveness of Europe’s steel sector.
Troy Hey, MMG’s executive general manager of corporate relations, expressed confidence that regulators would base their decision on factual evidence rather than geopolitical considerations. He emphasized that independent data submitted during the review indicated no risk of market foreclosure or incentive for MMG to limit supply.
Industry voices have highlighted the political sensitivity surrounding the deal. Christophe Moulin, senior nickel analyst at Benchmark Mineral Intelligence, described the matter as highly political for both Europe and its stainless steel producers. Eurofer, the European steel industry association, stated that the investigation’s outcome must ensure Europe’s ability to source responsibly and maintain high-quality stainless steel production within the bloc.
According to price reporting agency Fastmarkets, ferronickel is primarily produced in Brazil and Indonesia, while China does not have domestic production of the material. Anglo American emphasized that European customers have demonstrated flexibility in switching suppliers, suggesting supply disruptions could be managed.
However, critics view the transaction through the lens of a broader global competition for strategic resources. One opponent likened MMG’s assurances regarding Brazil’s supply reliability to a political analogy about energy security, implying skepticism about the guarantees. Robert Yildirim, founder of CoreX Holding, a competing supplier, warned that Europe could face difficulties replacing Anglo’s Brazilian nickel output if necessary, arguing that supply options are diminishing as Chinese companies increasingly dominate the market.
The outcome of the European Commission’s probe will likely have wider implications on how the EU balances open markets with concerns about foreign influence over critical raw materials essential to its industries.