Posted on 17 Oct 2024
French mining company Eramet has reduced production targets for its manganese mine in Gabon and nickel mine in Indonesia, Kallanish Power Materials learns.
It cited “depressed” manganese market conditions and a lower-than-expected permit allowance in Indonesia as reasons behind the decision.
A “sharp decline” in manganese ore purchases due to a significant drop in carbon steel production in China, coupled with the increase of low-grade ore, particularly from South Africa, is behind the manganese market downturn, the company explains.
“Against this current backdrop, Eramet, as a responsible mine operator, has decided to suspend ore production at the Moanda mine for a minimum period of 3 weeks; sales and shipments will continue during this period,” the company notes. “The duration of this suspension will be revised according to market activity.”
As such, the French miner has revised its 2024 target for produced and transported manganese ore from Moanda to 6.5-7 million tonnes, compared to the previous target of 7-7.5m t. The mine is operated through its subsidiary Comilog.
Meanwhile, in Indonesia, PT Weda Bay Nickel, Eramet’s subsidiary with Chinese group Tsingshan, this week was granted a revised operating permit by the country’s mines ministry. However, the sales approved under the revised permit fall “well short” of the revised permit application the subsidiary submitted.
As a result, the Weda Bay mine’s 2024 volume target for external marketable nickel ore has been revised to 29m wet metric tonnes, compared to 40-42m wmt before, Eramet notes.
Nonetheless, the company adds: “The impact on PT WBN’s 2024 financial performance is expected to be largely offset by a significant increase in ore premiums resulting from restrictions to domestic supply. This significant premium compared to the price floor for nickel ore sold locally (HPM) will benefit PT WBN sales in H2 2024.”
The company also plans to submit a request for revision of the permit for 2025 and 2026.
Eramet’s shares fell over 12% following the announcement on Tuesday. At the time of writing, shares were trading at €57.85 ($63)/share in Paris.
Source:Kallanish Power Materials
