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ERAMET Group's New Chairman Visits Japan and Holds Interview (2)
= Increase in production of nickel and manganese ores, and expectation from strong alloy division =
Ms. Christel Bories, Chairman and Chief Executive Officer of ERAMET Group, France visited Japan and held a press interview at Hotel Okura located in Minato-ward, Tokyo on July 6, and explained about its corporate activity in 2016 and its outlook for the future.

The contents of activities in 2016 in the respective divisions and its future outlooks are as follows.

[Nickel Division]
Content of Activity: (1) Nickel price continued to hover at a low level in 2016, and high-level nickel inventory in the warehouses designated by LME and SHFE was maintained, (2) As a result of putting emphasis on cost reduction at Societe Le Nickel (SLN) in New Caledonia, the cash cost is US$5.06, down by 16% from the prior year (US$6.00).

Future Outlook: (1) The cash cost at SLN in 2017 is targeted to be US$4.50 (down by 25% from 2015), (2) The new process line at Sandouvill refinery (France) will be installed to improve the profit and put into operation, (3) Raw materials (nickel matte) to be used at this refinery will be changed to the other source from SLN, (4) The contract will be concluded with Tsingshan group for the development from Weda Bay Nickel Project (Indonesia), (5) Weda Bay Nickel Project aims to start by 2018 and the nickel production is expected to be raised 50% (87,000 tons annually) by 2020 and (6) The world supply and demand balance for nickel in 2016 was in a state of supply being 50,000 - 60,000 tons less than demand. The supply shortage in 2017 is also thought to be nearly equal.

[Specialty Steel and Alloy Division]
Content of Activity: (1) 60% of the orders comes from the aviation industry as a growing industry, (2) Demands from Customers (Airbus and Boeing) continue to be strong, (3) Contribution to the success of Leap Engine Program developed by CFM and (4) Aubert & Duval keeps a good position in the field of large-sized forgings.

Future Outlook: (1) The plan to improve the performance is now going on across the organizations such as cost reduction and improvement of productivity at the production site, shortened delivery time and better customer facing, (2) Enhancement to improve quality performance, (3) Focus on improvement and enhancement of its position in the industry (Operation of MKAD plant, Commencement of operation of Eco Titanium, Operation of recycling facilities for spent catalysts and batteries, and Operation of a new producing facility for powder metallurgy).

[Manganese Division]
Content of Activity: (1) An increase of US$1 per dmtu in manganese ore price will increase the Company's business profit by EUR95 million. This showed an upward trend until the end of 2016. (2) The ore production volume was down by 12% from the prior year because the operation of the mine was suspended for one month due to a slumping price at the beginning of the year, (3) No obvious geopolitical risk is recognized in Gabon in comparison with other countries in Africa, (4) An increase of US$1 per ton in the price of Mn-containing ferroalloy will increase the Company's business profit by EUR65 million. The price showed an upward trend in 2016, and reached an all-time record high at the end of the year.

Future Outlook: (1) The production volume of manganese ore in 2017 is expected to be a normal level of about 4 million tons, (2) Focus is on the improvement of productivity at Moanda mine (Gabon) and modernization of railways, (3) Mn-containing ferroalloy plant and manganese metal plant in Gabon are now ramping up the production, (4) The production volume of Mn-containing ferroalloy has an upper limit. But, partly because of the expansion plan of the mine, the production volume of manganese ore may exceed 4 million tons in the future.

[Other business]
Content of Activity: (1) TIZIR sold ilmenite, rutile, leucoxene and titanium slag for purposes of pigment and welding, and the market in the former half of 2016 was firm and the prices were also stable, (2) The price of zircon used mainly for ceramics also got stabilized in the former half of 2016, (3) At the plant in Senegal, 614,000 tons of heavy mineral concentrates was produced in 2016, (4) At the plant in Norway, the accident occurred in August 2016, but the production made a recovery to the normal operation, (5) The market for lithium in 2016 was active, Eramet Lithium Project in Argentina succeeded in the experiment of extractive process, and lithium carbonate for battery was produced and (6) This project conducted a preliminary feasibility study, and the environmental permitting demand was filed in December 2016.
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last modified : Tue 18 Jul, 2017 [14:15]
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