From GlobeNewswire: 2025-02-19 12:30:00

Eramet has confirmed its resilience by successfully delivering on its strategic roadmap, including starting lithium production in Argentina and regaining full ownership of a world-class asset. Despite operational constraints in 2024, Adjusted EBITDA was €814m, Net Income was positive at €144m, and the “Act for Positive Mining” CSR roadmap saw a completion rate of 94%.

In 2024, Eramet faced challenges in a tough market environment but adapted production and controlled costs effectively. This resulted in regaining ownership of lithium assets in Argentina and a more financially robust position. Looking ahead to 2025, focus remains on operational performance and responsible mining practices under a new CEO.

The Group’s safety performance improved in 2024, with a TRIR of 0.7, below the target of 1.0 in the CSR roadmap. Despite progress, the Group mourns the loss of four subcontractors in accidents. Safety remains a top priority. The “Act for Positive Mining” roadmap also saw a 94% completion rate, impacted by safety incidents and carbon emissions. Eramet achieved notable successes in various areas, including social protection, diversity and inclusion, and economic development programs. Progress was made in decarbonization efforts, with 62% of the value chain engaged in trajectories aligned with the Paris Agreement. The company also received positive ratings from international agencies for its ESG performance.

In Q3 2024, Moody’s and Fitch revised Eramet’s long-term credit ratings to Ba3 and BB respectively, with negative outlooks. The company extended its debt profile maturity to 3.2 years, focusing on deleveraging to maintain adjusted leverage below 1x. Eramet’s capital allocation policy remains centered on maintaining financial stability.

Eramet’s financial statements for 2024 were approved by the Board of Directors, with key performance indicators now excluding SLN’s impact. The company’s adjusted turnover (excluding SLN) for 2024 was €3,377m, reflecting a 7% decrease compared to the previous year. Eramet continues to adapt and evolve in a changing market landscape. In 2024, Eramet experienced a negative price effect of -3% due to declining nickel and mineral sands prices, offset by an increase in manganese prices. Adjusted EBITDA was €814m, down 11%, with a positive intrinsic performance of +€135m but external factors negatively impacting EBITDA by -€222m.

Net income, Group share for 2024 was €14m, with net income (excluding SLN) at €144m. Capex totaled €602m, with adjusted Free Cash Flow at -€308m. Eramet’s net debt was €1,297m, with an adjusted leverage ratio of 1.8x.

Manganese EBITDA for 2024 was €563m, up 13% YoY. Manganese ore volumes sold externally decreased by -7%, but EBITDA for the ore activity was slightly up at €455m. Manganese alloys EBITDA increased to €108m (+96%).

Global carbon steel production in 2024 was stable at 1,883 Mt. China saw a 2% decline in steel production, North America and Europe both posted a 2% decline, while India had a 6% increase. Manganese ore consumption decreased by 6% in 2024 to 19.6 Mt-Mn. Global manganese ore production decreased in 2024 to 18.8 Mt-Mn (-9%). Prices averaged $5.5/dmtu, up 15% from 2023 but declined in Q4 2024. Gabon saw a drop in ore production and sales. Manganese alloys margin improved, and production was stable. Carbon steel production expected to remain stable in 2025.

Chinese port ore inventories decreased in Q4 2024. Manganese ore supply/demand balance was in deficit at year-end. Activities in Gabon saw a decline in ore production and sales. Manganese alloys production and sales were stable. FOB cash cost of manganese ore activity increased by 12% in 2024.

Outlook for manganese ore in 2025: demand expected to remain stable, supply may decline in H1. Market consensus predicts a decline in prices compared to 2024. Alloys demand and supply expected to be stable. Production at the Moanda mine will be adjusted according to market conditions.

Nickel – PT Weda Bay Nickel: Adjusted EBITDA for Nickel activity in 2024 was €266m (-38% vs. 2023). Production and sales for PT WBN nickel ore declined by 9%. PT WBN’s share of EBITDA was €271m, down by 36%, due to lower volumes sold and price index decline. Permit restrictions impacted sales. In 2024, PT WBN’s share of turnover decreased by 13% to €573 million, while their share of EBITDA dropped by 36% to €425 million. Nickel ore external sales decreased by 9% to 30.3 Mwmt, with NPI production down by 9% to 33.4 kt. Market trends show a surplus in the nickel market in 2024 with a decline in LME and NPI prices.

Global stainless-steel production increased by 6% in 2024, with China leading the way. Demand for primary nickel rose by 5%, but the market remained in surplus. The average LME price for nickel declined by 22% from 2023, while the NPI price index also saw a significant drop. PT WBN’s mining operations were constrained by government restrictions, impacting production and sales.

In 2024, PT WBN faced challenges with production costs, maintenance issues, and flooding impacting NPI plant operations. Sales were down 13%, limiting their contribution to Group FCF. Looking ahead to 2025, demand for primary nickel is expected to grow slowly, with production increasing moderately. The nickel market is forecasted to remain in surplus, with prices expected to decline slightly.

PT WBN’s outlook for 2025 includes limited nickel ore production and sales volumes due to government restrictions. They aim to target 29 Mwmt of external marketable nickel ore, with a favorable mix for saprolite. Despite challenges, PT WBN may continue benefitting from higher premiums compared to the local nickel ore price floor index. Haulage costs are set to rise again as the Group continues to work with Tsingshan to increase the mine’s capacity to 60 Mwmt per year by 2024, focusing on saprolite and limonite ore. Mineral Sands EBITDA was up 35% in 2024, with a 13% increase in turnover and a 14% increase in EBITDA compared to 2023.

Global demand for zircon remained stagnant in 2024, with prices down 7% to $1,893/t FOB. Demand for TiO2 pigments increased, supported by Chinese production growth. Ilmenite prices dropped 6% to $299/t FOB due to increased supply, especially from China.

In Senegal, mineral sands production increased by 41% in 2024, with ilmenite sales up 34% and zircon sales up 38%. The outlook for 2025 suggests increased demand for zircon and ilmenite, but prices may remain under pressure due to surplus production.

Eramet delivered its first lithium carbonate production in Argentina in December, with plans to ramp up production to 24,000 kt-LCE/year. Lithium carbonate prices averaged $12,500/t-LCE in 2024, down 68% due to higher supply than demand, despite strong demand in China.

Eramet regained full ownership of its lithium business in Argentina in 2024, with plans to position Ex-Works cash costs in the first quartile of the industry curve at around $5,000/t-LCE. Growth in demand for lithium is expected to be driven by increased electric vehicle sales, particularly in China. The demand for electric and plug-in hybrid models in Europe is expected to grow due to new CO2 emissions standards, driving the need for lithium in stationary energy storage systems. Despite a price decline in 2024, new lithium sites are set to start in 2025, keeping supply in surplus with prices under pressure.

Eramet’s Centenario plant is expected to reach full capacity by producing between 10 and 13 kt-LCE of lithium carbonate in 2025, with investments totaling around €80m. The Group is re-evaluating future expansion phases and estimates the long-term potential of the deposit at over 75,000 t-LCE.

Eramet decided against investing in a nickel-cobalt-refining plant in Indonesia but continues to explore opportunities in the nickel electric vehicle battery value chain. The Group also suspended its Battery Recycling Project in France due to uncertainties, but remains committed to developing a circular economy for critical metals.

Eramet is working on growth opportunities for lithium in Chile, acquiring mining concessions and signing farm-in agreements for exploration activities. Trade tensions in 2025 could escalate, impacting global growth, while demand for the Group’s products remains subdued. Prices are stabilizing at a low level, awaiting a rebound in demand, especially from China.

Manganese alloys selling prices are expected to decline in 2025, with potential volatility from protectionist measures. Nickel ore prices in Indonesia are indexed to the LME and are expected to benefit from higher premiums in 2025. Freight rates in 2025 are expected to decline, but uncertainties in the Red Sea could limit this decrease. Energy costs are projected to increase in 2025. Targets for 2025 include manganese ore transported volumes of 6.7-7.2 Mt and cash cost of $2.0-2.2/dmtu for FOB. Nickel ore sales are expected to reach 32 Mwmt externally and 3 Mwmt internally. Lithium carbonate and mineral sands volumes are also outlined.

Eramet plans to focus on productivity in 2025 amid market challenges. Investments are estimated between €400m and €450m, with current and growth capex allocated for various projects. A webcast for the 2024 annual results will be available on February 20, 2025, with a publication of first-quarter turnover on April 24, 2025.

Eramet aims to transform mineral resources sustainably for the industry’s growth and energy transition challenges. The group extracts essential metals like manganese, nickel, and lithium for a more sustainable world. Eramet’s ambition is to be a reference for responsible mineral resource transformation.

Production and sales figures for manganese, nickel, mineral sands, and lithium are detailed for 2024. Manganese ore production and transportation, nickel ore production and sales, and mineral sands production and sales are highlighted. Eramet’s efforts in sustainability and responsible resource management are emphasized throughout its operations. In the first half of 2024, manganese prices CIF China saw an increase of 5% to $14.08/dmtu, while ferromanganese prices in Europe rose by 5% to €11,499/t. Nickel prices on the LME dropped by 8% to $16,005/t and by 8% to $27.26/lb. Zircon prices decreased by 2% to $1,850/t.

HPM4 Nickel prices for 1.6%/35% dropped by 2% to $33/wmt and for 1.8%/35% fell by 2% to $37/wmt. Lithium carbonate prices CIF Asia decreased by 20% to $710/t LCE. Eramet reported a 2% decrease in chloride ilmenite prices to $295/t.

Eramet’s half-year average market prices showed a 2% increase in manganese turnover to €2,025 million and a 3% increase in manganese ore activity turnover to €1,124 million. Nickel adjusted turnover decreased by 15% to €636 million. Mineral sands turnover increased by 13% to €311 million.

Sensitivities to Eramet’s adjusted EBITDA (excluding SLN) showed that a $1/dmtu increase in manganese ore prices could impact earnings by around €255 million, while a $100/t increase in manganese alloys prices could impact earnings by €70 million. A $10/wmt increase in nickel ore prices could impact earnings by approximately €110 million. In 2024, Eramet reported a turnover of €2,933 million, with EBITDA at €371 million. The company had a net cash flow generated by operating activities of €364 million, with industrial investments totaling €273 million. The Free Cash-Flow for the year was reported at €101 million.

By region, Eramet’s sales destination turnover in 2024 included €764 million in Europe, €696 million in North America, and €408 million in South America. Industrial investments for the year were €328 million, with France accounting for €32 million and Europe for €34 million.

Eramet’s consolidated performance indicators in 2024 showed a turnover of €2,933 million and EBITDA of €371 million. The company reported a net income of €12 million from continuing operations and €206 million from discontinued operations. Basic earnings per share were €0.50.

In 2024, Eramet achieved a TRIR of 0.7 and had 2 fatal accidents. The company implemented actions to support the health and safety of its employees. Additionally, Eramet reported that 90% of its sites have a Well Being programme in place, with 30% of women in managerial positions.

Eramet’s CSR roadmap targets for 2026 include commitments to diversity and inclusion, health and safety, and environmental sustainability. The company aims to achieve 100% D&I label for its subsidiaries, maintain a TRIR <1.0, and reduce its CO2 emissions by 40% compared to 2019 levels. Eramet also plans to optimize water consumption, integrate biodiversity preservation, and reduce its environmental impact. Eramet aims to develop a responsible value chain with suppliers and customers, ensuring compliance with CSR practices. 90% of suppliers assessed by EcoVadis, 100% of customers yearly. Newcomers in sales and purchasing teams trained yearly. Audit every mining site with IRMA standards. Nickel ore production down 50% in New Caledonia due to societal issues, impact on exports and prices. Ferronickel production and sales also declined, affecting cash costs and spot prices. Adjusted turnover and EBITDA exclude SLN's losses, focusing on underlying performance. Eramet S.A. reports that EBITDA linked to ferronickel trading is still included in the adjusted EBITDA due to existing purchase and sales agreements. Current operating income and net income figures are adjusted for SLN's contributions. Adjusted Free Cash-Flow and leverage metrics provide insight into the company's financial health. The company separates its activities into manganese ore and manganese alloys sectors, with specific cost definitions for each. Manganese ore FOB cash cost and Ex-Works cash cost for lithium carbonate are detailed, along with SLN’s cash cost breakdown. Safety metrics, market data, and price indices are also provided for transparency and context. Eramet’s financial glossary in Appendix 10 offers definitions of key terms. The company’s commitment to safety is evident in its TRIR figures. Market data and price indices are based on the company’s estimates, providing valuable context for investors and stakeholders. Further details on production processes and cost structures are outlined for clarity.


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