Exclusive-MMG faces EU antitrust warning over Anglo American deal, sources say

By Foo Yun Chee

BRUSSELS, Sept 8 (Reuters) - EU regulators are preparing to warn Hong Kong-listed mining and metals company MMG over its plan to buy Anglo American's Brazilian nickel business because of competition concerns, three people familiar with the matter said.

The step reflects mounting European Union concern about the bloc's reliance on China for critical minerals vital to defence, technology and renewable energy and Beijing's use of export control measures on critical mineral supplies.

The European Commission, which acts as the EU competition enforcer, is preparing to send out this month what is known as a statement of objections or a charge sheet, setting out the concerns that will need to be addressed for the deal to be cleared, the people said. They spoke on condition of anonymity because the matter is not yet public.

MMG could stave off the charge sheet by offering remedies, but this is regarded as unlikely, one of the people said. 

The EU antitrust watchdog and MMG declined to comment. Anglo American reiterated comments issued two weeks ago.

"The evidence we've provided demonstrates that this transaction poses no competition concerns to the EU market and should be approved unconditionally," it said in a statement to Reuters.

"Over the past year, the market has benefited from a significant structural expansion of FeNi supply from a number of producers, whilst European customers have shown how readily they can switch between their various suppliers," it said.

The Commission in November said the deal could enable MMG to divert ferronickel from Europe and undermine the competitiveness of European stainless steel production.

(Reporting by Foo Yun Chee; editing by Barbara Lewis and Tomasz Janowski)