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The Anglo American logo is seen in Rusternburg October 5, 2015. Picture taken October 5, 2015. REUTERS/Siphiwe Sibeko TPX IMAGES OF THE DAY Purchase Licensing Rights, opens new tab

CompaniesBRUSSELS, Oct 8 (Reuters) - Hong Kong-listed mining and metals company MMG (1208.HK), opens new tab accused EU antitrust regulators on Thursday of ignoring evidence that its ​bid for Anglo American's (AAL.L), opens new tab Brazilian nickel business would not divert ‌supplies from Europe to China.

The comments came after a day-long hearing at which MMG and Anglo American defended the $500 million deal before EU antitrust regulators, including the ​European Commission's top merger official, Guillaume Loriot.

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"The Commission's decision to ​open an in-depth inquiry and the allegations of a plan ⁠to divert supply of ferronickel from Europe are fundamentally unsupported," MMG's ​executive general manager for corporate relations Troy Hey told reporters.

"The Commission has ​selectively used two partial and misleading quotations from over 200,000 documents supplied by MMG and its major shareholder — while ignoring all the other evidence, economic and market analysis ​to the contrary," he said.

The Commission, the EU's competition watchdog, warned last ​month that MMG could redirect ferronickel supplies away from Europe, potentially harming the bloc's ‌stainless ⁠steel producers. The case comes amid broader EU concerns about dependence on China for critical minerals.

Hey also accused the Commission of ignoring market developments since opening a full-scale investigation in November and the independent market analysis ​it had commissioned.

He ​said commodities traders ⁠Glencore and Trafigura had written to the Commission saying they were confident MMG would continue supplying them.

Hey said ​MMG was willing to address all of the Commission's ​concerns, ⁠suggesting it may be prepared to offer remedies in the coming weeks.

Anglo American Brazil Chief Operating Officer Ruben Fernandes and Chief Financial Officer Cristina Morgan ⁠were ​expected to tell regulators at the hearing that ​blocking the deal would likely force the mine to close, according to prepared remarks seen ​by Reuters on Wednesday.

Reporting by Foo Yun Chee. Editing by Mark Potter

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Mining bosses say that regulatory scrutiny of major mergers is increasing as governments pay closer attention to critical minerals and security of supply ​in the face of a volatile geopolitical backdrop, but they do not see the shift as a fundamental barrier ‌to dealmaking.

Executives at Glencore (GLEN.L), Anglo American (AAL.L) and Rio Tinto (RIO.L), (RIO.AX) said after half-year results in July and August that antitrust reviews and national interest were becoming more prominent factors when assessing potential transactions, particularly where copper and other critical minerals are involved.

But they said the increased scrutiny was manageable and that, while some reviews could take longer, regulatory ​hurdles were not making large mining mergers and acquisitions unworkable.

VALUATION, STRATEGY AND SHAREHOLDERS REMAIN BIG OBSTACLES
"Regulators have always taken a look ​at any M&A," said Glencore CEO Gary Nagle. But he noted that the various watchdogs are now paying ⁠even closer attention "given the geopolitics of the world and critical minerals".

Glencore takes regulatory approval into account before pursuing transactions, Nagle said. "Of course, ​we're not going to go down a route of something that we don't believe is achievable or executable," he said.

The industry's recent record of ​failed or abandoned mega-deals suggests valuation, strategy and shareholder considerations have been more important obstacles than regulation. Rio Tinto and Glencore held talks over a potential combination while BHP (BHP.AX) made several attempts to acquire Anglo American. Neither transaction came close to completion.

Anglo's proposed merger with Teck Resources (TECKb.TO), however, illustrates how the regulatory landscape is evolving.

China is ​the last major jurisdiction still to approve the deal and could seek remedies focused on security of supply rather than an outright asset ​sale, investors say.

The combined group would have a relatively small share of global copper production at about 5%, limiting the case for a structural remedy, while ‌China's ⁠large and unutilised smelting capacity could make commitments to supply Chinese customers a more relevant tool.

That would echo China's approach to Glencore's acquisition of Xstrata in 2013. Beijing approved that deal subject to both structural and behavioural remedies, including the sale of the Las Bambas copper project in Peru and commitments to supply Chinese customers with copper, zinc and lead.

GEOPOLITICAL CONSIDERATIONS TO THE FORE
The difference today is the geopolitical backdrop.

Governments are ​increasingly concerned not only with whether ​a merger reduces competition, but ⁠also with who controls strategically important mines, where critical minerals are processed and whether supplies can be diverted away from domestic industries.

Anglo's sale of its nickel assets to China's MMG is an example of broader scrutiny. ​The European Commission has opened an in-depth investigation, saying the transaction could enable MMG to divert ferronickel ​supply away from European ⁠markets.

Anglo CEO Duncan Wanblad said mining transactions were taking "probably a little bit longer than they might have done five years ago", with companies needing to allow 12 to 18 months for regulatory approvals.

He rejected the idea that regulation was making deals fundamentally more difficult.

"I have nothing to suggest at ⁠this point ​in time that mining-related transactions are impossible to get done or difficult to get ​done," Wanblad said.

Rio Tinto CFO Peter Cunningham said the company would be "very, very disciplined" about M&A and needed to "think very, very deeply" about regulatory and other constraints before pursuing ​acquisitions.

But he described fluctuations in regulatory scrutiny as part of the industry's normal cycle.