(Updates to add Anglo American's comment)
The European Commission raised competition concerns over MMG's (HKG:1208) proposed acquisition of Anglo American's nickel business, according to a statement on Wednesday.
The Commission said the deal may restrict competition in the low-carbon ferronickel market.
It said MMG could divert low-carbon ferronickel supply from European markets to affiliated stainless steel producers controlled by China's SASAC, potentially raising costs for European stainless steel producers.
The Commission said the market is highly concentrated and alternative supply sources for European customers are limited.
In an emailed response to, Anglo American expressed disappointment that the regulatory process will continue despite the company presenting "extensive independent evidence" that the deal poses no competition concerns.
"European customers of FeNi benefit from competitive, diverse and increasing supply from numerous producers across Latin America, New Caledonia, South Korea, Indonesia, Japan and others. This transaction does nothing to change that, while maintaining (rather than consolidating) the number of suppliers in the market," the miner said.
MMG did not immediately respond to' request for comment.