EU Commission Scrutinizes MMG's $500M Nickel Purchase Due to Competition Fears

In early 2025, Anglo American announced the proposed sale of its nickel operations in Brazil, valued at US$500 million, to MMG Singapore Resources, a subsidiary of the Chinese state-owned MMG. Since the announcement, this deal, involving two active ferronickel sites in Goiás, Barro Alto and Codemin, and two future nickel projects in Mato Grosso and Pará, has drawn regulatory scrutiny.

Recently, the European Commission notified MMG that its preliminary analysis suggests the acquisition might impede competition in the low-carbon ferronickel market, a critical material in manufacturing stainless steel. This assessment raises concerns about potential competitive constraints in this sector.

Global Concerns Over MMG's Market Impact and Merger

The Commission has raised concerns that following the merger, MMG might redirect some of its low-carbon ferronickel supplies away from European markets, which would increase the production costs of stainless steel in Europe. This transaction between the two companies has also encountered objections from the United States.

Reports from Brazilian media indicate that the administration under Donald Trump advised the Brazilian government to reconsider the sale of Anglo American’s nickel assets to MMG amidst ongoing discussions about tariffs between the U.S. and Brazil. This opposition from international governments occurs against a backdrop of escalating tariff tensions and a movement towards protective measures across various economic sectors.

Additionally, several nations have voiced concerns over China’s expanding role in the mining sector, fearing this could jeopardize their access to essential resources.

"The displeasure of European countries and the United States with China’s influence in Brazil and throughout Latin America is not a surprise and can also be healthy for some sectors. While it is true that China has made many investments in various sectors of the region, it is also true that this participation has been accompanied by restrictions on the participation of companies from other countries in projects involving China," the president of a Brazilian business association, who asked not to be identified in the article, told BNamericas.

Future actions:

• When the European Commission issues a statement of objections, it's a standard formal step in an investigation, indicating specific competition concerns about a deal.
• This step does not guarantee a final decision or indicate that the transaction will necessarily be blocked.
• MMG can defend its position by reviewing the Commission's case files, submitting a formal written response, and requesting an oral hearing.
• The European Commission reviews international mergers and acquisitions, even if the target assets are located outside Europe, provided the companies meet certain global and European revenue thresholds.
• The goal of the Commission's review is to protect European market competition and prevent major market distortions, regardless of the physical location of assets.