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Interview with Mr. Buffet, Chairman of ERAMET, France in Tokyo (2)
The press interview with Mr. Patrick Buffet, Chairman and Chief Executive Officer (CEO) of ERAMET, France who visited Japan was held at Hotel Okura on July 2. Following the presentation on the Company's business activities made by Chairman Buffet, the top persons of the respective divisions made replies and explanations to the questions raised by the reporters present in the press interview as follows:

(1)Nickel Division:
1.As to the impact from dollar appreciation and cheap crude oil price, the weak Euro was a favorable situation for export business of our company having a plant in New Caledonia (Euro area). Besides, as the electric power is a thermal power, the cheap crude oil price also was an advantageous condition.

2.We do not think about production adjustment specifically, but have a plan to enhance competitiveness through curtailing the costs. We achieved an one-dollar cost reduction during 2009 to 2012. And we are aiming at another one-dollar reduction during 2013 to 2018. In addition to this, we have a plan to build a coal-fired thermal power plant instead of an oil-fired one, and accordingly one-dollar cost reduction is anticipated to be carried out. Hence, the cost will be down by a total of US$3.00 from the year 2008.

3.However, the Government of New Caledonia is now making an offer to buy an additional interest, but if this government obtains the majority of the interest, we have to reconsider the investment in the power plant.

4.One of the reasons why the decision to proceed with Weda Bay nickel project has been postponed is a slumping nickel price. Under such situation, the investors and bankers cannot be positive in making an investment. Besides, although the contract of work (CoW) with the Government of Indonesia was renewed last year, its content was also one of the reasons for postponement.

5.Norilsk's nickel unwrought has been approved as a brand in the Shanghai Futures Exchange (SHFE), but we are now taking a wait-and-see attitude. Our production and sales are balanced, and we can hardly afford to supply ours for futures trading. Furthermore, we are in the middle of looking to how SHFE will be growing in the future.

(2)Special Steel Alloy Division:
The business profit earned by Special Steel Alloy Division in 2014 was more than other divisions. This was due to the implementation of cost reduction. The cost was reduced by EUR35 million in 2014, and we will continue to reduce the cost aiming at a total cost reduction of EUR125 million during 2014 to 2017.

(3)Manganese Division:
1.Moanda Metallurgic Complex in Gabon started an official operation in June 2015, but started production of silico manganese since last year. The production of manganese metal is anticipated to start during the end of 2016 to the beginning of 2017.

2.In Moanda, the project has started to produce silico manganese and manganese metal at an annual rate of 65,000 tons and 20,000 tons respectively. Both of these products are thought to be suitable to Japanese customers. At the present moment, as Chinese manganese metal is predominant in the market, ours can be thought as a side supply source. Besides, as to silico manganese, it contains a high manganese like 70% and a low boron which will meet Japanese customers' requirement.

3.That silico manganese has already been discharged also in Japan.

4.Eramet Comilog Manganese sets its goal for the annual production volume of manganese ore at 4 million tons, and is nearing the goal in light of the production volume in the period from January to March in 2015 being at a rate of 3.8 million tons in a year. As the current performance is good, the production at a rate of 3.8Mtpa is expected to be achieved within the year. Besides, the future production is targeted to be 5Mtpa, which however will be after the enhancement of the rail transportation is done. The system to surely transport 4 million tons is thought to be necessary, and the modernization of the transportation facilities will be carried out in the future by investing EUR300 million. Then, the annual production of 5 million tons will be sought after that.

5.One of the reasons for a drastic drop in the manganese ore price was due to the increase in new producers owing to weak Rand in South Africa, which led to the increased supply volume. The recent prices get stabilized and the sharp price hike can hardly be expected and vice versa, i.e. such a case is thought not to happen as the price will drop sharply from this level.

(P.S) In our article dated July 6 regarding "Interview with Mr. Buffet, Chairman of ERAMET, France in Tokyo

(1)", there are some errors in pictures and positions of top persons of the respective divisions, and the correct ones are as follows.

1.Mr. Patrick Buffet, Chairman and CEO
2.Mr. Philippe Gundermann, VP Strategy & financial Communication
3.Mr. Bertrand Madelin, Delegate CEO Eramet Nickel
4.Mr. Denis Hugelmann, CEO Alloys
last modified : Wed 15 Jul, 2015 [09:43]
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