• Deal parties focus on lack of legal basis for EC intervention
• Opponents warn of threat to supply security of strategic metal
• Test case for resilience provisions in regulator’s new guidelines

MMG’s bid to acquire Anglo American’s Brazilian nickel mines continues to confront the European Commission (EC) with two diametrically opposed views of the impact of the up to USD 500m deal, according to several sources close to the situation.

It is a case that brings to a head key questions the regulator is grappling with as it continues to work on its new merger guidelines: how to reconcile the EC’s commitment to a fact-based assessment grounded in sound theories of harm with a changed geopolitical landscape where countries compete for access to essential resources, one of the sources commented.

In the first camp is MMG – majority-owned by state-run China Minmetals Corporation (CMC) – which, according to two of the sources, argues that the EC has no legal justification for intervention. The company says this has been made even more clear by facts that have emerged since the EC opened its in-depth investigation into the deal in November last year.

In the other camp, voices from the industry continue to clamour for intervention, three other sources said. EU companies have long relied on Anglo American’s Brazilian mines for ferronickel (FeNi), an essential input in the manufacture of stainless steel. Their view is that for a company controlled by China to acquire these resources represents an existential threat to the EU’s stainless steel industry, the sources added.

Both camps are currently in active discussions with the EC’s merger watchdog, as it decides whether to file formal charges against the deal, the sources said.

No legal basis to oppose

The first two sources said that for MMG, the case boils down to the fact that the EC does not, on the basis of the law, have a case for standing in the way of this deal.

When it opened its in-depth investigation, the EC expressed concerns that post-transaction, MMG would redirect the mines’ low carbon FeNi previously sold to European customers to Chinese state-owned steelmakers – an input foreclosure theory of harm.

According to the first two sources, MMG insists, however, that even if it wanted to, it would not have the ability to foreclose European stainless steel producers’ access to low carbon FeNi. It argues there are sufficient alternative sources of supply, notably from the companies Vale, CoreX and Solway, which it says have taken steps to increase capacity since the EC opened the in-depth investigation.

This contention is backed up, one of the sources said, by a report commissioned at the EC’s request from Steel & Metals Market Research (SMR), which MMG calls the “leading” European company providing market intelligence and data for the specialty steel sector. The report, this source said, shows that available low carbon FeNi supply will far exceed the European quantities previously served by the Anglo American mines.

Next, MMG has presented the EC with evidence that EU customers can and do switch FeNi suppliers and they do multisource, something that had been called into question earlier in the proceeding, the first two sources said.

In a statement to this news service, Anglo American confirmed the increased FeNi supply and customer switching arguments, saying “it is therefore even clearer now that the EC should have no concerns whatsoever about volumes and producer diversification”.

Absent the ability to foreclose access, the sources said MMG is telling the commission, there is no need to go further, because the first essential limb of the input foreclosure theory of harm is missing. For good measure, though, MMG also covers the second limb: incentive. According to the two sources, it argues there would be no economically rational reason for it to refuse to continue to supply the lucrative European market.

“We have shown clearly that this transaction poses no competition concerns to the EU market and why it should therefore be approved unconditionally,” Anglo American said in its statement.

China and security of supply

For the industry, the other three sources said, the case boils down to this: MMG’s acquisition of these nickel mines is another step toward China cornering the FeNi market.

Without FeNi, the EU industry cannot produce stainless steel, a material used in critical infrastructure, defence systems and industrial supply chains.

According to the sources, industry representatives are telling the Commission that putting control of that input in China’s hands is a risk the EU simply cannot take; it must act to protect its industry’s security of supply.

While MMG contests this, the three sources said that for the deal’s opponents, China’s control of MMG is “crystal clear”. They point to it being over 67% held by China Minmetals Corp and cite its “almost exclusively Chinese” board, strategic links with other Chinese state-owned companies (CSOEs) and subsidies in the form of unsecured loans, among other things.

China’s rapidly growing hunger for Brazilian FeNi is a “red flag”, one of the sources said. The opponents have provided the Commission with evidence that China’s share of Brazilian FeNi exports has nearly doubled in the past three years, from 19% in 2024 and 27% in 2025 to 39% in the first six months of 2026, this source said.

The deal’s opponents are telling the EC that MMG’s arguments about adequate alternative FeNi suppliers would still leave the EC industry “very insecure” about supply security, two of the sources said. First of all, they say supplies from CoreX’s mine in Colombia and Solway’s in Guatemala are at best “theoretical” considering those countries’ logistical challenges.

The industry is also telling the EC it cannot rely on Vale because of its strong links to China, one of the sources said. Vale had an iron ore mining joint venture in Brazil with China’s Baosteel, the largest steel manufacturer in the world, for nearly 25 years. While the Baovale joint venture ended in February 2025, the sources said Vale continues to maintain cooperative relationships with Chinese steel producers, including decarbonisation and research cooperation with Baosteel, as well as the Morowali ferronickel project in Indonesia involving China’s Taiyuan Iron & Steel.

China already controls most of Indonesia’s nickel mines, said one of the sources who is familiar with the sector. Indonesia is the world’s dominant nickel supplier, controlling more than 60% of global mine production.

With the addition of these Brazilian mines, China would “directly or indirectly” control too high a percentage of the world’s nickel supply, the opponents are telling the EC, according to the same source.

New approach for a new era

When this news service asked Competition Commissioner Teresa Ribera about this case last December, she spoke in terms of the EU’s “economic security”. She stressed that the EC “is not against any country or jurisdiction” but said “we need to update the way we relate in a very open economy that operates in global markets”.

That is one of the key objectives of the EC’s ongoing revision of its merger guidelines.

Opponents of the deal are telling the Commission, the three sources said, that new provisions in the draft guidelines on resilience, including the “security and diversity of supply”, are written precisely for this sort of case. They are urging the Commission not to be “naive” when it comes to a strategic resource like steel, where the EU’s industry has long struggled to survive in the face of Chinese competition.

MMG, too, is telling the EC to look at the broader context and urging it not to use merger control to try to address matters best tackled through other measures. For instance, it has cited the New Steel Tool – an EU regulation that came into effect in July, establishing a new framework to protect the EU steel industry from the effects of global overcapacity, two of the sources said.

As Anglo American put it in its statement, “the EU’s new tough steel measure has capped Chinese steel imports into the EU – which means Chinese stainless steel cannot be redirected to the EU and cannot therefore be a threat”.

The MMG case puts the dilemma squarely before the Commission. It has the difficult task of evaluating incentives in a new geopolitical environment where entities might have reasons for acting that go beyond short-term profitability, said an additional source close to the matter. But the EC also has to consider the broader context, where such moves might spur Chinese regulators to retaliate in kind, to protect their companies’ overseas investment interests.

The EC is expected to decide whether to serve MMG with a formal statement of objections to its deal during September.

In July, the deal parties agreed to extend the long-stop date until 31 October.

The European Commission and MMG declined to comment for this article.