Eramet produces first lithium from Centenario plant in Argentina
Eramet becomes the first European company to produce lithium carbonate at an industrial scale.
Eramet on Monday raised its target for full-year core earnings after strong quarterly sales but warned that pandemic-related disruption in New Caledonia had exacerbated the difficulties of its nickel business there.
Eramet now expects full-year earnings before interest, tax, depreciation and amortisation to be close to 1 billion euros ($1.16 billion), compared with previous expectations of more than 850 million euros.
Third-quarter sales were up 34% year on year at 1.1 billion euros and market conditions remain favourable for the fourth quarter, Eramet said.
Attractive metal prices allowed Eramet to absorb high shipping costs while the impact from rising gas and electricity markets was expected to be limited in 2021 given its supply mix and contracts, the group added.
For mining supply, Eramet increased its target for full-year nickel ore output in Indonesia to about 14 million wet tonnes from 12 million previously, while maintaining its 7 million tonne target for manganese ore output in Gabon.
However, expectations for nickel ore exports from New Caledonia were reduced to “more than 3 million wet tonnes”, having previously targeted 3.5 million wet tonnes, and it expects ferronickel production this year to reach only 40,000 tonnes.
A wave of covid-19 infections in the French Pacific territory of New Caledonia had disrupted Eramet’s struggling SLN nickel business.
“The current health context has reinforced the critical situation at SLN, whose business fundamentals and cash position deteriorated further in Q3 despite a nickel market up significantly,” Eramet said.
Alloys maker Aubert & Duval, meanwhile, has been hit by the pandemic-related slump in aviation and Eramet said that a sale of the business remains its preferred option.
A fire at Aubert & Duval’s Pamiers plant had hurt quarterly sales and is expected to reduced the unit’s free cash flow in 2021 by about 50 million euros, Eramet said.
The sale of the Sandouville nickel processing plant in France to South Africa’s Sibanye-Stillwater, agreed earlier this year, is expected to be completed early next year, Eramet added.
($1 = 0.8593 euros)
(By Gus Trompiz; Editing by David Goodman)
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