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France plans to invest €500 million in Eramet, potentially increasing its stake from 27% to 49%.
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The investment aims to strengthen Eramet’s finances and secure critical metal supplies for European industries.
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High debt, declining revenue and continued losses remain major risks despite the planned capital increase.
The French government plans to increase its ownership of Eramet, a major French mining and metals company, through a €500 million capital increase that could raise its stake from 27% to as much as 49%.
The transaction is intended to strengthen Eramet’s finances and help secure supplies of critical metals needed by France and other European industries. It will involve shares held by the Duval family, which currently owns about 37% of the company.
Announced on October 12, 2026, the planned capital increase is expected to take place after Eramet releases its third-quarter sales report on October 29 and before the end of the year.
French government set to increase ownership
The proposed transaction would make the French government Eramet’s largest shareholder, giving it a substantially bigger stake in the company.
The government currently owns about 27% of Eramet, while the Duval family holds approximately 37%. Under the proposed arrangement, the government’s stake could rise to 49% through a capital increase valued at €500 million.
The investment is designed to provide additional financial support to the mining group as it deals with losses, declining revenue and a heavy debt burden.
Eramet chair and chief executive officer Christel Bories said the move would help strengthen the company’s financial position while supporting the supply chains for metals considered important to France and Europe.
The transaction also reflects the strategic importance of mining companies that produce materials used in industrial manufacturing, infrastructure and battery production.
Eramet produces metals for key industries
Eramet is a French mining and metallurgical group involved in the extraction and processing of manganese, nickel, mineral sands and lithium.
Its products serve several industries, including steelmaking, aerospace, pigments and battery manufacturing. The company operates across multiple countries, with assets in Gabon, New Caledonia, Indonesia, Senegal and Argentina.
Eramet is also developing lithium projects in Argentina and France as demand for battery materials continues to attract investment from governments and companies seeking to expand supply chains for electric vehicles and energy storage.
Increasing government ownership could give the French state a greater role in supporting the company’s future and securing access to metals considered strategically important.
However, the planned investment comes at a time when Eramet faces financial challenges that could affect its ability to fund operations and expansion without additional support.
Heavy debt and losses remain concerns
Despite the proposed capital injection, Eramet’s financial position remains a concern. According to GuruFocus, the company has a debt-to-equity ratio of 7.07 and an Altman Z-Score of 0.52. The latter is a financial indicator used to assess the risk of corporate distress, with low scores potentially signalling elevated financial risk.
Eramet also recorded a negative net margin of 18.18% and a negative operating margin of 1.24%, according to the report. Its earnings per share over the trailing 12 months stood at negative 21.2, making its price-to-earnings ratio unsuitable for conventional valuation comparisons.
The company’s revenue has also declined at a compounded annual rate of 17.7% over the past three years, adding pressure to its financial performance.
The planned capital increase could provide additional resources to support the business, but it does not by itself guarantee a return to profitability or resolve all the company’s debt-related challenges.
Shares trade below historical valuation levels
Eramet’s price-to-sales ratio stands at approximately 0.45 times, below both its historical median and the industry median of about 0.53 times, according to GuruFocus.
The ratio compares a company’s market value with its revenue. A lower multiple can indicate that investors are assigning a relatively low value to each unit of sales, although it does not necessarily mean a stock is undervalued.
GuruFocus estimates Eramet’s intrinsic value at $67.61 per share, compared with a reported share price of $49.40. This suggests potential upside under the platform’s valuation model, but the estimate relies on assumptions that may not fully account for the company’s financial risks.
The report also gives Eramet a GF Score of 66 out of 100, with stronger ratings for valuation and momentum than for profitability, growth and financial strength.
Its financial strength rating is 3 out of 10, while profitability and growth each score 4 out of 10. Valuation scores 8 out of 10 and momentum scores 7 out of 10.
These figures suggest that the company’s market valuation and recent share-price performance compare more favourably than its underlying financial health.
Capital increase to shape Eramet’s future
The planned €500 million investment could give Eramet additional financial support while strengthening the French government’s influence over the group.
The company’s ability to improve revenue, control debt and return to profitability will remain important factors for investors. Its exposure to metals used in steel production, aerospace and batteries could offer opportunities, but future performance will also depend on commodity prices, operating costs and demand from industrial customers.
The proposed transaction is expected to be completed between the October 29 third-quarter sales report and the end of 2026. Until then, the final ownership structure and the longer-term effect of the investment will depend on the terms and completion of the capital increase.
