Anglo American (LON: AAL) will likely shut down its Brazilian nickel operation if EU antitrust regulators block its sale to Hong Kong-listed mining and metals company MMG, its chief operating officer will warn regulators at a closed hearing on Thursday, according to prepared comments obtained by Reuters.
Anglo American Brazil COO Ruben Fernandes and Cristina Morgan, the company’s chief financial officer in Brazil, will seek to convince the European Commission that the $500 million deal with MMG will not hurt European stainless steel producers.
The Commission, which is the EU antitrust watchdog, had last month warned that MMG may divert the supply away from Europe to the detriment of its stainless steel producers. The case comes amidst EU concerns about the bloc’s reliance on China for critical minerals.
“The protracted regulatory review has already caused considerable uncertainty locally, but the consequences of the EC prohibiting the sale of the business would be very troubling,” Fernandes will tell regulators, according to remarks seen by Reuters.
“Recognising that MMG is the only credible buyer that we identified, and given our commitment to exit our nickel business more than two years ago, we will have little option but to head towards ‘care and maintenance’ as the pathway to closure in the event that the Commission prohibits the sale to MMG,” he will say.
According to the prepared remarks, he will tell regulators that it is possible to find a practical solution that will address the EU concerns.
Morgan will underline MMG’s credentials as a credible buyer who will continue to serve customers in Europe.
“The selection process scrutinised the prospective bidder’s operational capabilities and track record of operating responsibly, ability to develop future projects and intentions for our employees, fair value, along with the ability to fund the acquisition,” she will tell the EU watchdog.
“MMG is a fellow ICMM member, is well known to us and has that track record of being a responsible operator and offering deliverable value for the investment,” she will say, referring to the industry body the International Council on Mining and Metals.
MMG’s executive general manager of corporate relations Troy Hey will also be at the hearing arguing for the merits of the deal to senior Commission officials and lawyers.
(Reporting by Foo Yun Chee; Editing by Aurora Ellis)
