# C_2007058EN.01000901.xml

| 13.3.2007 | EN | Official Journal of the European Union | C 58/9 |
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13.3.2007

EN

Official Journal of the European Union

C 58/9

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Opinion of the Advisory Committee on concentrations given at its 140th meeting on 26 June 2006 concerning a draft decision relating to Case COMP/M.4000 — Inco/Falconbridge

(Text with EEA relevance)

(2007/C 58/03)

| 1. | The Advisory Committee agrees with the Commission that the notified operation constitutes a concentration within the meaning of Article 1(3) and 3(1)(b) of the Merger Regulation and that it has a Community dimension as defined by the Merger Regulation. |
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1.

The Advisory Committee agrees with the Commission that the notified operation constitutes a concentration within the meaning of Article 1(3) and 3(1)(b) of the Merger Regulation and that it has a Community dimension as defined by the Merger Regulation.

| 2. | The Advisory Committee agrees with the Commission that for the purpose of assessing the present operation, the relevant product markets are:






  a) | The supply of nickel products to the plating and electroforming industry; |
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2.

The Advisory Committee agrees with the Commission that for the purpose of assessing the present operation, the relevant product markets are:

a)

The supply of nickel products to the plating and electroforming industry;

| b) | The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts; and |
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b)

The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts; and

| c) | The supply of high purity cobalt for the production of super alloys used in safety critical parts. |
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c)

The supply of high purity cobalt for the production of super alloys used in safety critical parts.

| 3. | The Advisory Committee agrees with the Commission that for the purpose of assessing the present operation, the relevant geographic market is EEA-wide for the market for the supply of nickel products to the plating and electroforming industry. |
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3.

The Advisory Committee agrees with the Commission that for the purpose of assessing the present operation, the relevant geographic market is EEA-wide for the market for the supply of nickel products to the plating and electroforming industry.

| 4. | The Advisory Committee agrees with the Commission that for the purpose of assessing the present operation, the relevant geographic markets are worldwide for the following markets:






  a) | The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts; and |
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4.

The Advisory Committee agrees with the Commission that for the purpose of assessing the present operation, the relevant geographic markets are worldwide for the following markets:

a)

The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts; and

| b) | The supply of high purity cobalt for the production of super alloys used in safety critical parts. |
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b)

The supply of high purity cobalt for the production of super alloys used in safety critical parts.

| 5. | The Advisory Committee agrees with the Commission that the proposed concentration is likely to significantly impede effective competition in the common market or in a substantial part of it and the EEA, in particular as a result of the creation of a dominant position, for the following markets:






  a) | The supply of nickel to the plating and electroforming industry in the EEA; |
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5.

The Advisory Committee agrees with the Commission that the proposed concentration is likely to significantly impede effective competition in the common market or in a substantial part of it and the EEA, in particular as a result of the creation of a dominant position, for the following markets:

a)

The supply of nickel to the plating and electroforming industry in the EEA;

| b) | The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts worldwide; and |
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b)

The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts worldwide; and

| c) | The supply of high purity cobalt for the production of super alloys used in safety critical parts worldwide. |
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c)

The supply of high purity cobalt for the production of super alloys used in safety critical parts worldwide.

| 6. | The Advisory Committee agrees that, following the proposed concentration, Inco/Falconbridge will not have the ability or incentive to influence London Metal Exchange (LME) nickel prices by delaying part of their nickel mining projects. |
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6.

The Advisory Committee agrees that, following the proposed concentration, Inco/Falconbridge will not have the ability or incentive to influence London Metal Exchange (LME) nickel prices by delaying part of their nickel mining projects.

| 7. | The Advisory Committee agrees that the parties have neither demonstrated convincingly enough that the efficiencies could not have been achieved by another means nor would they benefit directly consumers. |
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7.

The Advisory Committee agrees that the parties have neither demonstrated convincingly enough that the efficiencies could not have been achieved by another means nor would they benefit directly consumers.

| 8. | The Advisory Committee agrees that vertical integration (over the whole chain consisting in mining, processing and refining activities) is currently the prevailing business model in the nickel industry offering significant competitive advantages, both in terms of access to suitable feed in sufficient quantities and over the long-term and in terms of ability to compete on the relevant markets. |
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8.

The Advisory Committee agrees that vertical integration (over the whole chain consisting in mining, processing and refining activities) is currently the prevailing business model in the nickel industry offering significant competitive advantages, both in terms of access to suitable feed in sufficient quantities and over the long-term and in terms of ability to compete on the relevant markets.

| 9. | The Advisory Committee agrees that a significant degree of vertical integration is not necessary in order to ensure access to sufficient and suitable feed in the cobalt industry. |
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9.

The Advisory Committee agrees that a significant degree of vertical integration is not necessary in order to ensure access to sufficient and suitable feed in the cobalt industry.

| 10. | The Advisory Committee agrees with the Commission that the undertakings consisting in the divestment of Falconbridge's Nikkelverk refinery and related assets to a purchaser active in metals mining and/or processing with access to sufficient feed to sustain the viability of the divested business, along with the offer to enter with the purchaser into a 10-year flexible feed supply agreement covering a substantial part of Nikkelverk's feed requirements, are sufficient to remove the significant impediment to competition, and will ensure the presence of a viable competitor in the three relevant markets:






  a) | The supply of nickel to the plating and electroforming industry in the EEA; |
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10.

The Advisory Committee agrees with the Commission that the undertakings consisting in the divestment of Falconbridge's Nikkelverk refinery and related assets to a purchaser active in metals mining and/or processing with access to sufficient feed to sustain the viability of the divested business, along with the offer to enter with the purchaser into a 10-year flexible feed supply agreement covering a substantial part of Nikkelverk's feed requirements, are sufficient to remove the significant impediment to competition, and will ensure the presence of a viable competitor in the three relevant markets:

a)

The supply of nickel to the plating and electroforming industry in the EEA;

| b) | The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts worldwide; and |
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b)

The supply of high purity nickel for the production of super alloys/super alloys used in safety critical parts worldwide; and

| c) | The supply of high purity cobalt for the production of super alloys used in safety critical parts worldwide. |
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c)

The supply of high purity cobalt for the production of super alloys used in safety critical parts worldwide.

| 11. | The Advisory Committee agrees that LionOre is a suitable purchaser for the divested business and that it will ensure the independence, viability, and competitiveness of the divested business in the long term. |
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11.

The Advisory Committee agrees that LionOre is a suitable purchaser for the divested business and that it will ensure the independence, viability, and competitiveness of the divested business in the long term.

| 12. | The Advisory Committee agrees with the Commission that, subject to full compliance with the undertakings offered by the parties, and considered all undertakings together, the proposed concentration does not significantly impede effective competition in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, within the meaning of Article 2(2) of the Merger Regulation and that the proposed concentration is therefore to be declared compatible with Article 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement. |
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12.

The Advisory Committee agrees with the Commission that, subject to full compliance with the undertakings offered by the parties, and considered all undertakings together, the proposed concentration does not significantly impede effective competition in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, within the meaning of Article 2(2) of the Merger Regulation and that the proposed concentration is therefore to be declared compatible with Article 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.

| 13. | The Advisory Committee asks the Commission to take into account all the other points raised during the discussion. |
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13.

The Advisory Committee asks the Commission to take into account all the other points raised during the discussion.

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