(AOF) –
Eramet
(- 6.53% to 93 euros)
The title of the mining and metallurgical company is penalized by the decline in base metals.
AOF – LEARN MORE
Key points
– Producer, created in 1880, of ores and alloy metals, powerful in manganese ore and ferronickel (1
er
worldwide), in zircon and titanium-bearing materials (4
th
global) ;
– 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 by the French State Participation Agency (227.1%), STCPI (4%, Société Territoriale Calédonienne de Participation Industrielle, owned by the New Caledonian provinces) and the Duval family (37 .1%), Cristel Bories being CEO of the 17-member board;
– Balance sheet completely cleaned up with debt reduced to €388m, ie a leverage effect of less than 1, compared to €1.3bn in equity.
Challenges
– Managerial and digital transformation strategy in 3 points: reposition the least efficient assets, grow in attractive businesses – manganese ores and mineral sands, expand the portfolio in metals for energy transformation – nickel and cobalt salts and recycling lithium-ion batteries;
– Innovation strategy carried out by the IDEAS center in Trappes, endowed with 35 M€: deployed internally via the Data Factory: mines and industry 4.0 (management by data, additive production, robotization, IoT, artificial intelligence, etc.) and dematerialization of sales flows… / reinforced 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 the safe management of residues) / circular economy and protection of resources in water 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;
– Total refocusing on minerals with the sale by the end of 2022 of Aubert & Duval.
Challenges
– Sensitivity to the political climate in New Caledonia, to geopolitical risks in Gabon and Senegal and to variations in metal prices;
– Sensitivity to energy, freight and coke price inflation;
– Towards a sale at the end of the year of the A&D-high performance alloys division;
– 2022 objective: increase in production, including 7.5 Mt of manganese in Gabon, 15 Mt of nickel in Indonesia and 4 Mt exported to New Caledonia, resulting in an operating profit of around €1.20 billion;
– 2021 dividend of €2.5.
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.