(AOF) – Eramet has announced the repayment of all of its bond loan for a total amount of 500 million euros bearing interest at the rate of 4.196% per year maturing on February 28, 2024. The bonds thus repaid will be cancelled. The repayment of the bonds allows the mining group to continue the proactive management of its debt profile and to extend its average maturity, which is now close to 3 years.
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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 €3.7 billion, split into 2 divisions: 81% for mines and metals and 29% for alloys and high-performance alloys;
– Sales made in Asia for 45%, Europe (31%) and North America (19%),
– 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 the Duval family (36.94%), Cristel Bories being CEO of the 18-member board;
– 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:
– 40% reduction in CO2 emissions by 2035 through the use of R&D, particularly in the decarbonization of metallurgical production,
– rehabilitation of mining sites (including safe management of tailings),
– circular economy and protection of water resources and air quality;
– 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 political risks in New Caledonia and geopolitics in Gabon and Senegal;
– Inflation in the prices of energy (consumption covered at 80% over the long term), freight and coke and inputs: optimization of power-intensive plants and increase in productivity;
– Delays in the implementation of the rescue plan for the New Caledonian nickel site;
– End of the year marked by a decline in demand for manganese alloys and their selling prices, by a drop in the selling prices of nickel ore and mineral sands;
– After a 61% increase in sales at the end of September, 2022 objective revised slightly downwards: increase in production, including 7.5 Mt of manganese in Gabon, 16 Mt of nickel in Indonesia and 3 Mt exported from New Caledonia, hence an operating profit of around €1.5 billion.
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.