Posted 23 Feb. 2022 at 19:21Updated Feb 23. 2022 at 19:28
Eramet is finally starting to pull its head above water. After two consecutive years of losses, marred by a governance crisis, the difficult restructuring of its subsidiary in New Caledonia and internal fraud, the French mining group has just recorded a positive net result and finally sees the horizon emerge.
In 2021, the profit generated amounts to 298 million euros for a turnover up 31% to 3.67 billion euros. CEO Christel Bories, whose reappointment was stormy, does not hide her “satisfaction” and salutes her teams who have been there throughout the year.
The rise in commodity prices has certainly supported the group’s activity. Nickel prices have, for example, returned to levels not seen for nearly 10 years at 25,000 dollars per ton. But the group was above all able to rely on production records. In Indonesia, the Weda Bay mine exceeded all expectations with 14 million tonnes of nickel ore extracted against 7 million forecast.
“The production figures in Indonesia show that within Eramet we have skills that enable us to develop our assets rapidly,” explains Christel Bories. In just a few months, Weda Bay has become one of the largest open pit nickel mines in the world. For 2022, the group expects a production of 15 million tonnes of ore.
Planets aligned against SLN
Société Le Nickel (SLN), a struggling subsidiary of Eramet in New Caledonia, has for its part accumulated setbacks. It suffered from blockages linked to the sale of a competing factory in the south of the Archipelago. And the rainy season, which hinders the extraction of minerals, has been more intense and longer than usual due to the La Niña weather phenomenon.
In the second part of the year, the Covid arrived on the Caillou, causing absenteeism to explode (40 to 45%) and to top it off, a section of the power plant broke down. But thanks to very high nickel prices, “SLN did not consume any cash”, reassures the leader.
The group’s overall performance is all the more solid as Eramet had to record a series of losses linked to the sale of several assets. That of the sale of Aubert & Duval, in particular, with an impact of 340 million euros on the accounts, to which must be added the sale of the Sandouville nickel plant. In total, the negative impact of these operations amounts to 426 million euros.
For the leader, these disposals mark a new stage. “This is excellent news for A&D, now backed by aeronautics specialists who will be able to invest in the tool and in growth, explains Christel Bories. It is also very good news for Eramet, which can refocus on its strategic mining and metallurgy business, and on the energy transition segment”.
Fraud limited to 45 million euros
Eramet can now devote itself entirely to the production of metals to dispense with fossil fuels. The lithium project in Argentina has been relaunched and the group is considering accelerating the production of nickel and cobalt salts in Indonesia with its partner BASF around 2025-2026.
After the financial fraud at the end of the year, the financial director Thomas Devedjian confirmed that the impact was limited to 45 million euros and indicates possible reimbursements via insurance. An employee, since terminated, made an unauthorized investment and falsified documents to conceal a loss. The motivation of the employee has yet to be determined, but the suspicions of personal enrichment are strong. The group filed a complaint.
Iron health for Rio Tinto
The mining giant Rio Tinto published an annual profit up 72% to 21.4 billion dollars for the whole of 2021. The Australian giant took full advantage of the surge in iron ore prices, its main product. The price had risen to more than 200 dollars per ton for the first time in history while extraction costs are around 15 dollars per ton.