China-backed miner confident EU will back $500mn Anglo American nickel deal
MMG executive Troy Hey says company plans to keep serving existing European customers
China-backed miner MMG is confident of winning European approval for a $500mn deal to buy Anglo American’s nickel assets, despite concerns about Beijing’s dominance of critical mineral supply chains.
Troy Hey, MMG ’s executive general manager of corporate relations, confirmed that European antitrust regulators had expressed reservations about the group’s Chinese majority ownership.
But he said the company was “confident” it would get EU approval, given that it did not at present operate in the ferronickel market or in Brazil, where the Anglo nickel assets are located. Europe is a major market for the business being acquired by MMG.
“From a competition basis, we’re very confident that as new entrants to this market . . . and with very strong demand in Europe, we’re in a good place,” Hey told the Financial Times.
Anglo’s nickel business had a “solid European customer base” that MMG was “100 per cent committed to” serving, he added.
The deal agreed in February between Anglo and MMG, which is two-thirds owned by state-owned China Minmetals, has attracted criticism from groups who say it will reinforce China’s control of metals that are crucial for the energy transition.
The planned tie-up is part of the London-listed miner’s restructuring plan that it initiated after fending off an attempted takeover by rival BHP. Anglo has since announced a $50bn megamerger with Canadian group Teck Resources.
The American Iron and Steel Institute was among the groups that pushed back against Anglo’s deal with MMG, urging the White House to intervene because it said the deal would reinforce China’s influence over nickel, which is used in electric vehicles and stainless steel.
But Hey argued that Hong Kong-listed MMG’s Chinese ownership would provide much-needed support in a challenging nickel market that has seen prices slump since 2022.
“You have somebody who is able to invest and grow, [is] able to run an asset for the long [term] and sustainably, and continue to produce those products, which are in strong demand, especially in European, Asian and US markets”, he said.
Hey said he expected the EU to make a decision before the end of the year. The deal has not yet been filed with antitrust authorities in Brussels, and an attempt to get quick approval through a simplified procedure was withdrawn in May.
Separately, Brazilian authorities opened a probe into the sale last week after receiving a complaint from a competitor. Cade, the main antitrust body, said that did not necessarily mean it would block the deal. Hey said MMG was in touch with the Brazilian authorities.
MMG was also looking for opportunities in the copper market, said Hey. “Copper is our number one target . . . [although new] opportunities are difficult to find,” he said. Almost 80 per cent of the company’s sales in the six months to June 30 came from its copper business.