transportation of Eramet ore (photo credit: Eramet media group / )
(AOF) – French mining and metallurgical company, Eramet suspended its operations in the country after the coup in Gabon. Consequently, its title fell by more than 15% to 64.15 euros at the SBF 120, occupying the last place in the index. “As of this morning, all Comilog and Setrag operations have been shut down and rail traffic has been suspended,” a spokesman for the group told Reuters. Compagnie Minière de l’Ogooué (Comilog) is a Gabonese multinational based in Moanda, a subsidiary of Eramet.
The Société d’exploitation du Transgabonais (Setrag) is a rail transport company operating the Gabonese railway network owned by Comilog.
A group of a dozen Gabonese soldiers announced on Wednesday “to put an end to the regime in place”, the cancellation of the presidential election and the dissolution of “all the institutions of the Republic”.
AOF – LEARN MORE
Key points
– Producer, created in 1880, of ores and alloy metals, powerful in manganese ore and ferronickel (1st worldwide), in zircon and titanium materials (4th worldwide);
– Turnover of €5 billion, refocused on mining and metals – manganese for 63% of sales, nickel for 28%, mineral sands for 9%, lithium being under development;
– Sales made in Asia for 46% (including 21% in China), in Europe for 30% (including 6% for France), in South America for 13% and in North America for 6% ;
– Business model: based on the recovery of metals and minerals essential to economic development (manganese, nickel, mineral sands) and energy transition (lithium, nickel/cobalt salts, battery recycling);
– Capital jointly controlled at 62.51% by the French State Participation Agency (25.57%), by the STCPI (4%, Société Territoriale Calédonienne de Participation Industrielle, held by the New Caledonian provinces) and by BRGM (1.24%), Cristel Bories being CEO of the board of 18 directors ;
– Cleaned up balance sheet with debt leverage of €4 and €1.3 billion in equity.
Challenges
– Managerial and digital transformation strategy in 3 points:
– reposition the least performing assets,
– grow in attractive businesses – manganese ores and mineral sands,
– expand the portfolio in metals for energy transformation – nickel and cobalt salts and recycling of lithium-ion batteries;
– Innovation strategy carried out by the IDEAS center in Trappes, endowed with 35 M€:
– deployed internally via the Data Factory: mining and industry 4.0 (data management, additive production, robotization, IoT, artificial intelligence, etc.) and dematerialization of sales flows, etc.,
– strengthened by scientific partnerships and European projects;
– Environmental strategy to contribute to carbon neutrality in 2050:
– 40% reduction in CO2 emissions by 2035, particularly in the decarbonization of metallurgical production and the rehabilitation of mining sites (residue management),
– circular economy and protection of water resources and air quality,
– increase to 40% in 2030, vs 2019, of loans linked to sustainable development ;
– Portfolio of world-class resources: manganese (Moanda in Gabon), nickel (New Caledonia and Weda Bay in Indonesia), mineral sands (Senegal) and lithium carbonate (Argentina);
– Result of exploration work on rutile reserves (metal used in the production of titanium) in Cameroon and ongoing research in the French subsoil of mainland France;
– Nickel-cobalt projects for batteries, in particular at Weda Bay, and battery recycling projects in France.
Challenges
– Sensitivity to geopolitical risks in New Caledonia, Gabon and Senegal;
– Persistent inflation in energy, freight, coke and input prices and decline at the start of the year in manganese and nickel selling prices;
– Result of exploration work on rutile reserves in Cameroon (metal useful for the production of titanium) and execution of industrial projects for the energy transition (nickel & cobalt at Sonic Bay, lithium at Centerario and in Alsace, recycling of batteries in France…) ;
– Continued debt reduction, with a targeted leverage effect of less than 1 and maintenance of the annual level of liquidity at €300 million ;
– 2023 expectations revised down by one:
– volumes: 7 Mt of manganese in Gabon, 39 Mth of nickel ore in Indonesia,
– operating income around 1.1 billion, down +40%;
– 2022 dividend up 40% to €3.5.
An ecological transition that drives metal prices
The ecological transition is driving demand and driving up prices. Thus lithium prices jumped 100% last year, supported by sales of electric cars. The needs for metals such as aluminum, copper, graphite, or nickel should soar by 2050. The war in Ukraine has reinforced the rise in prices because Russia is a major producer of mineral raw materials , in particular aluminium, palladium, nickel and titanium. The International Energy Agency (IEA) recently warned of the risk of a shortage of several metals necessary for the energy transition. Europe has mobilized on strategic metals with the aim of strengthening its sovereignty.