JOHANNESBURG (miningweekly.com) – French multinational Eramet’s operating income for 2017 is expected to exceed that of the previous year, the nickel and manganese producer reported on Tuesday, citing higher prices and productivity gains.
The Euronext Paris exchange-listed miner reported operating profit of €84-million in 2016 and said this year’s profit would be “significantly” higher, pointing out that the operating income of the second half of 2017 was already above that of the first half.
Eramet said that manganese ore and alloy prices had held up well this year and noted that, although still low, nickel prices had also started to recover. The group is upbeat about the prospects of nickel, which not only supplies the stainless steel sector, but now also the lithium-ion battery sector.
Eramet’s third-quarter sales increased by 23% year-on-year to €877-million, comprising manganese sales of €492-million, nickel sales of €143-million, alloy sales of €241-million and holding company contributions of €1-million.
Third-quarter manganese sales are 39% higher than those of the corresponding period, as manganese ore prices recovered strongly on the back of stronger global steel output. Eramet set a new production record of 1.14-million tonnes of manganese ore at Moanda, in Gabon, in the September quarter. This enabled its subsidiary Comilog to produce 3.1-million tonnes over the first nine months of the year, up 27% on the same period a year earlier, and in line with a target to produce 4-million tonnes in 2017.
Third-quarter nickel sales were 7% below that of the third quarter of 2016. Eramet noted that nickel prices are starting to recover, with the average price having increased to $4.77/lb in the third quarter, compared with an average of $4.66/lb in the third quarter of 2016 and $4.43/lb in the first half of 2017. The group expects demand for nickel from sectors other than stainless steel to grow at about 5% a year over the next few years, including about 15% a year in the batteries sector.
The group said primary nickel consumption was forecast to increase by about 6% this year to 2.2-million tonnes.
Eramet produced 42 070 t of nickel at its Doniabmo plant, in New Caledonia, in the September quarter. The Sandouville plant is being ramped up to its capacity of 15 000 t/y of high-purity nickel metal and nickel salts.
The group’s total sales for the first nine months of 2017 amount to €2.67-billion, which is 28% ahead of sales of the same period last year.