MMG to guarantee European ferronickel supply to address EU concerns about Anglo American deal

By Bart H. Meijer and Foo Yun Chee

Oct 23 (Reuters) - Hong Kong-listed mining and metals company MMG 1208.HK offered on Friday to guarantee the supply of ferronickel to European stainless steel producers, in an effort to address EU antitrust concerns over 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 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.

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 offer a legally binding guarantee to European stainless steel producers - who are existing customers of Anglo American - that they will have access to the same volume of ferronickel they currently buy from the miner 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.

Anglo American 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.