MMG to guarantee European ferronickel supply in bid for EU approval of Anglo American deal (updated)

Glencore

Today 14:49

Adds European Commission declines comment in paragraph 9, MMG ownership in paragraph 4, changes headline
By Bart H. Meijer and Foo Yun Chee
Oct 23 (Reuters) - Hong Kong-listed MMG 1208.HK offered on Friday to guarantee the supply of ferronickel to European stainless steel producers in an effort to secure EU antitrust approval for its $500 million bid for Anglo American's AAL.L Brazilian nickel business.
MMG's offer followed a combative closed hearing earlier this month where the mining and metals company and Anglo American defended the deal before European Commission officials and third parties. 
The Commission, which is the EU competition enforcer, has warned that MMG could redirect ferronickel supplies away from Europe to China, potentially harming the bloc's stainless steel producers amid broader EU concerns about dependence on China for critical minerals. 
China's state-owned Minmetals holds 67% of MMG, with the rest owned by investors including BlackRock and Vanguard.
MMG's offer is "a legally enforceable guarantee to maintain existing levels of supply under UK law, which can be independently monitored", Troy Hey, MMG’s executive general manager for corporate relations, said in a statement.
In essence, this means MMG will guarantee that European stainless steel producers who are existing Anglo American customers can access the same volume of ferronickel they now buy from the company for the lifetime of the Brazilian mine, a person with direct knowledge of the matter said. 
Anglo American has threatened to close the mine in Brazil if the deal is blocked by the EU watchdog. The company said the remedy should lead to the Commission approving the deal.
"This robust, effective and comprehensive solution will provide European stainless steel producers with a security of supply insurance policy, entirely removing any of the competition concerns put forward by the Commission," an Anglo American spokesperson said.
The Commission declined to comment. It extended its decision on the deal to December 21.

 (Reporting by Bart Meijer and Foo Yun Chee; Editing by Susan Fenton and Jan Harvey)
 ((Bart.Meijer@thomsonreuters.com;))