Eramet raises its goal of results despite the setbacks in New Caledonia

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PARIS, Oct. 25 (Reuters) – French mining group Eramet (ERMT.PA) raised its baseline annual profit target on Monday after strong quarterly sales, but warned that pandemic disruptions in New Caledonia had exacerbated the difficulties of its nickel business there.

Eramet now expects an annual profit before interest, taxes and depreciation of close to 1 billion euros (1.16 billion euros), against previous forecasts of more than 850 million euros.

Third-quarter revenue was up 34% year-on-year to 1.1 billion euros and market conditions remain favorable for the fourth quarter, Eramet said.

Attractive metal prices have enabled Eramet to absorb high transport costs while the impact of the rise in the gas and electricity markets should be limited in 2021 given its supply mix and its contracts, the group added.

For mining supply, Eramet has raised its annual nickel ore production target in Indonesia to around 14 million wet tonnes from 12 million previously, while maintaining its target of 7 million tonnes of manganese ore production in Gabon. .

However, expectations for New Caledonian nickel ore exports have been reduced to “over 3 million wet tonnes”, after previously targeting 3.5 million wet tonnes, and she expects this year, ferronickel production is only 40,000 tonnes.

A wave of COVID-19 infections on the French territory of the Pacific of New Caledonia had disrupted the SLN nickel activity of Eramet in difficulty.

“The current health environment has reinforced the critical situation of SLN, whose business fundamentals and cash position deteriorated further in the third quarter despite a sharply rising nickel market,” said Eramet.

Alloy maker Aubert & Duval, meanwhile, has been hit by the slump linked to the aviation pandemic and Eramet has said that a sale of the company remains his preferred option.

A fire at the Aubert & Duval plant in Pamiers has penalized quarterly sales and is expected to reduce the unit’s free cash flow in 2021 by around € 50 million, Eramet said.

The sale of the Sandouville nickel processing plant in France to South Africa’s Sibanye-Stillwater (SSWJ.J), agreed at the start of the year, is expected to be finalized early next year, Eramet added.

($ 1 = € 0.8593)

Reporting by Gus Trompiz Editing by David Goodman

Our Standards: Thomson Reuters Trust Principles.

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