The European Commission (EC) has approved Inco's acquisition of fellow Canadian miner Falconbridge.

Approval was subject to certain conditions, however, but was the final obstacle in the way of the deal.

Although approval was widely expected, it was needed before the July 12th deadline set for the deal by the European regulator.

The conditions attached to the EC go-ahead for the takeover reflect those laid down by US competition authorities when they approved it.

They allowed the takeover provided that Falconbridge sells its nickel refinery in Norway.

"We are pleased with the conclusion of the commission's second phase review and its clearance of the combination of Inco and Falconbridge," said Scott Hand, chairman and chief executive of Inco.

"With this final clearance behind us, we can now move forward with our offer to acquire Falconbridge."

Combining the two firms will produce benefits allowing the new company to boost pgm production over the next few years.

Based on current growth projects and expansion plans, and as a result of the synergies accounted for to date, Inco and Falconbridge expect by 2009 to increase production of platinum group metals by approximately 111,000 oz in their combined Canadian operations.

As a newly combined company, Inco and Falconbridge have already agreed to a $40 billion offer from US company Phelps Dodge.

Ÿ Adfero Ltd