Eramet cuts targets for Gabon and Indonesia mines on market, permit setbacks
France's Eramet on Tuesday cut sharply its 2024 production targets for its manganese mine in Gabon and nickel mine in Indonesia, citing a downturn in the manganese market and a smaller-than-expected permit allowance in Indonesia.
The Moanda mine in Gabon and the Weda Bay mine in Indonesia are each the world's biggest for their respective minerals, and have driven Eramet's growth as its historic nickel operation in New Caledonia has been drained by losses and social unrest.
Eramet had raised its full-year core profit guidance in July on a jump in manganese prices.
But the group said in a statement that the manganese market had deteriorated due to a strong decline in Chinese output of carbon steel - the main use for manganese - and an influx of low-grade manganese following the rise in prices earlier this year.
Eramet's Comilog subsidiary is set to suspend ore production at the Moanda mine for a minimum period of three weeks, with the duration to be revised according to market activity, the group said.
The 2024 target for produced and transported manganese ore from Moanda is now between 6.5-million and 7.0-million metric tons, compared with 7.0-million to 7.5-million previously, it said.
In Indonesia, the country's mines ministry this week issued PT Weda Bay Nickel, Eramet's joint venture with Chinese group Tsingshan, with a revised allowance of 32-million wet tons annually for 2024 to 2026, including 3-million for internal sales, Eramet said.
As a result the operation's 2024 volume target for external marketable nickel ore has been revised to 29-million wet tons from 40-million to 42-million previously, Eramet said.
The impact on the operation's 2024 financial performance is expected to be largely offset by higher ore premiums resulting from restrictions to domestic supply, Eramet added.
The French group will publish a third-quarter sales update on Oct. 24.
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