Photo credit © © David Becker / ERAMET
(Boursier.com) — Eramet returns 0.9% to 70.4 euros after a gain of around 10% over the last two sessions. A push to be linked to the difficulties encountered by GEMCO, the group’s main competitor in manganese, and to the presentation of the first measures for the nickel industry in New Caledonia.
The French government has urged authorities and three ailing nickel plant operators on the Pacific island to agree on a recovery plan by the end of the month, the finance minister said on Thursday Bruno Le Maire. “Either we will all agree and work together in the same direction, and there will be a future for the nickel industry in New Caledonia, or we are divided and it will be extremely more difficult in this case,” said the minister during a press briefing. The proposed “pact” will be examined by the Congress of New Caledonia on March 28. It notably includes 200 ME/year of energy subsidies for power plants, paid by the French State and local authorities; tax relief for factories; a new mining code to guarantee better access to nickel ore and more exports; and the government’s commitment to investing in new energy generation assets on the island to reduce energy costs.
To take into account the predictable – but undoubtedly temporary – rise in manganese, Oddo BHF is raising its price target from 92 to 94 euros (based on a sum of the parts). Unlike large mining companies impacted by the decline in iron, Eramet currently benefits from a rather favorable commodity mix with the rebound of nickel at the LME, lithium in addition to manganese, ferronickel and the NPI remaining depressed. The broker’s ‘outperformance’ recommendation is also based on the very attractive valuation since the 2025e adjusted EV/EBITDA multiple is limited to 3.4x, a discount of one third on other mining companies.
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