According to Financial Times News, the European Commission is preparing to launch an in-depth investigation into the $500 million sale of Anglo American’s nickel business to China-backed MMG. The transaction, agreed in February between Anglo and MMG—which is two-thirds owned by state-owned China Minmetals—has faced criticism for potentially reinforcing Beijing’s control over metals crucial for the energy transition. MMG believed it had addressed competition concerns through remedies guaranteeing continued supply to European markets, but Brussels concluded there were grounds for a probe, with a decision deadline of November 4. The investigation comes amid escalating tensions between China and the EU over rare earth access, following China’s recent export restrictions on critical minerals and the Netherlands’ seizure of chipmaker Nexperia from its Chinese owner. This regulatory scrutiny represents a critical juncture in global resource politics.
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The Broader Geopolitical Context
This investigation represents far more than a routine competition review—it’s a strategic move in the escalating global competition for critical minerals. The European Commission is essentially drawing a line in the sand regarding foreign control of resources essential for Europe’s green transition and technological sovereignty. Nickel isn’t just another commodity; it’s fundamental to electric vehicle batteries, renewable energy storage, and numerous defense applications. With China already dominating rare earth processing and battery component manufacturing, European regulators appear determined to prevent similar consolidation in the nickel supply chain. This aligns with the EU’s Critical Raw Materials Act objectives but creates immediate friction with Beijing‘s global resource acquisition strategy.
Hidden Supply Chain Vulnerabilities
What makes this case particularly significant is the timing and interconnected nature of global supply chains. Europe’s automotive and defense industries face dual pressures: transitioning to electric vehicles while maintaining technological independence. The recent Chinese export restrictions on rare earth elements demonstrate how quickly supply chains can be weaponized. While MMG’s proposed remedies might address immediate competition concerns, they don’t resolve the fundamental risk of depending on state-owned enterprise controlled supply for strategic materials. European manufacturers could find themselves in a position where their nickel supply—however competitively priced—remains subject to geopolitical considerations beyond market dynamics.
The Problem with Proposed Remedies
MMG’s surprise at the Commission’s rejection of their proposed remedy package reveals a fundamental misunderstanding of European regulatory priorities. The company’s confidence in “informal customer support” suggests they approached this as a traditional competition case rather than recognizing the strategic dimension. Maintaining Anglo American as a marketing intermediary might address pricing concerns but does nothing to prevent supply disruption during geopolitical tensions. European regulators are likely considering scenarios where Chinese-controlled entities might prioritize domestic needs or use supply as leverage in broader disputes—something no marketing arrangement can adequately mitigate.
Broader Industry Implications
This investigation sends clear signals to the entire mining and metals sector. Companies with assets in United Kingdom and EU jurisdictions will need to reassess potential acquirers’ geopolitical profiles, not just their financial offers. We’re likely to see increased scrutiny of any resource transactions involving state-backed entities from countries with which the EU has strategic tensions. This could accelerate the re-shoring and friend-shoring of critical mineral processing capacity, but at significantly higher costs. The November 4 deadline gives both sides limited time to negotiate structural solutions that address both competition and security concerns—a challenging balance that will set precedents for future deals.
Realistic Resolution Scenarios
The most likely outcome involves either significant structural concessions from MMG or deal abandonment. Potential compromises could include European joint venture partners, binding supply guarantees with independent oversight, or European government golden shares in the acquired assets. However, given the strategic importance of nickel and current geopolitical tensions, the Commission may determine that no remedies adequately address the fundamental concerns about Chinese state control. This case could become a landmark defining how Western economies balance open investment principles with strategic resource security in an increasingly fragmented global economy.
