Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Mining group Eramet on Thursday reduced sharply its forecast for nickel ore production from its flagship Indonesian mine this year, citing a slowdown in permit approvals.
The French firm also cut its full-year guidance for core earnings by 11% to about 800 million euros ($843.12 million), saying a sharp fall in metal prices was expected to continue in the fourth quarter.
Eramet now expects Weda Bay in Indonesia, the world’s largest nickel mine that it operates in a joint venture with Chinese steel giant Tsingshan, to produce 30 million wet metric tons in 2023, down 5 million tons from its previous outlook.
The mine nonetheless continues to expand rapidly, with 8.8 million wet tons produced in the third quarter, almost triple the volume sold in the year-earlier period, Eramet said in a quarterly sales statement.
In New Caledonia, where the group’s SLN nickel subsidiary is trying to reverse years of losses, Eramet trimmed its target for nickel ore exports to 3 million metric tons, from more than 3 million, as permit disputes curbed its mine supply.
In manganese, the group also lowered its full-year forecast for transported ore output in Gabon, now seen at 7 million tons compared with a previous objective of above 7 million tons, as it factored in logistics disruptions at the start of the year.
However, a brief halt of its operations in Gabon in late August following a military coup had no impact on quarterly performance and third-quarter ore production reached a record 2.1 million tons, the miner said.
($1 = 0.9489 euros)
(By Gus Trompiz; Editing by Jamie Freed)
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