KEY POINTS
- Eramet lowers 2024 production targets for manganese and nickel.
- The manganese market has weakened due to reduced Chinese demand.
- A revised mining permit in Indonesia limits nickel output for 2024.
The French mining corporation Eramet cited a drop in the manganese market and a smaller-than-expected permit limit in Indonesia to reduce its 2024 production targets for nickel mine in Indonesia and its manganese mine in Gabon.
Eramet reduces 2024 manganese and nickel production targets
Since Eramet’s traditional nickel operations in New Caledonia have struggled due to losses and societal upheaval, the two greatest producers of manganese and nickel, respectively, are the Moanda mine in Gabon and the Weda Bay mine in Indonesia. These mines have played a significant role in Eramet’s expansion.
Following a surge in manganese prices, Eramet increased its expectation for core profit for the entire year in July. However, the company said that the market for manganese had collapsed as a result of an infusion of low-grade manganese after the previous price hike and a steep decline in China’s output of carbon steel, which is dependent on manganese.
Higher ore premiums are expected to offset the financial impact
According to a report by Mining.com, the Moanda mine’s ore production will be suspended for a minimum of three weeks by Eramet’s Comilog subsidiary, with the duration of the suspension being determined by market conditions. The Moanda manganese ore target for 2024 has been reduced from 7.0 million to 7.5 million metric tonnes to 6.5 million to 7.0 million metric tonnes.
The Indonesian government has updated the permit for Eramet’s joint venture with Tsingshan of China, PT Weda Bay Nickel, enabling 32 million wet tonnes per year between 2024 and 2026, of which 3 million are for internal sales. The production goal of marketable nickel ore for external use in 2024 has been lowered from 40 million to 42 million wet tonnes.
Eramet stated that because of limitations on domestic supply, the financial impact of this modification would be partly offset by higher prices for the remaining ore.
On October 24, the business will provide an update on its third-quarter revenues.
