Eramet Capital Markets Day “A New ERA”
Paris, 13 November 2023, 8:00 a.m.
PRESS RELEASE
Eramet Capital Markets Day
“A New ERA”
Today at 2:00 p.m. CET, Eramet will host its
first Capital Markets Day in Paris.
The event will be held in person and by
webcast.
Chair and CEO Christel Bories will be joined by
other Executive Committee members: Nicolas Carré, Chief Financial
Officer, Geoff Streeton, Chief Development Officer, Kleber Silva,
Chief Operating Officer and Virginie De Chassey, Chief
Sustainability and External Affairs Officer. They will present the
Group’s repositioning and “A New ERA”’s strategy, as well as the
new CSR roadmap.
-
Successful and ambitious transformation delivered over the
past six years, strategically repositioning Eramet as a
pure mining & metals player and a key contributor to a
sustainable future in the new era of metals.
-
World-class mining assets positioned in the first
quartile of the cost curves, in manganese,
nickel, mineral sands and
lithium, underpinning “A New ERA”’s strategy based
on two axes:
- Growing in metals
supporting global economic development,
- Sustainably developing
critical metals for the energy transition.
-
Launching Eramet’s new roadmap “Act for positive
mining”: an ambition at the heart of Eramet’s strategy and
fully embedded in its operations.
-
Continuing to progress on projects
developing critical metals for the energy
transition: investment decision made1 for Centenario Phase
2, with the first tranche recently approved by Eramet’s Board of
Directors.
-
Preparing for future growth: recent acquisition of
a large package of mining concessions in the Atacama region of
northern Chile for an upfront payment of $95m. These concessions
cover a highly prospective cluster of lithium salars.
- Strong
operational targets on an annual basis by 2026:
- 8.5
Mt of manganese ore produced and
transported in Gabon, with 10 Mt potential over the long-term,
- 60
Mwmt of nickel ore volumes sold at Weda
Bay in Indonesia,
- >1.0
Mt of mineral sands
(HMC2) produced at GCO
in Senegal,
- 24 kt
battery-grade lithium
(LCE3) produced in
Argentina (Centenario, Phase 1), with c.30 kt-LCE additional
volumes mid-term (Phase 2, 1st tranche).
- Robust
financial structure enabling the deployment of a
capex plan of c.€1.9bn over 2024-2026 to sustain
cash-generating assets as well as to fuel future growth4, primarily
in the energy transition.
-
Maintaining an Adjusted leverage below 1x on average
through the cycle, with a temporary deviation above this
threshold during the near-term investment period.
Christel Bories, Group Chair
and CEO:
- Eramet’s first
Capital Markets Day celebrates the achievements of our
transformation and marks the beginning of an exciting new chapter
of success for the Group and all its stakeholders.
Over the past six years, we have repositioned
the Group into a pure leading mining and metals company with a
diversified portfolio of world-class assets and a more agile
organization, driven by a strong corporate purpose: to become a
reference for the responsible transformation of the earth’s mineral
resources for living well together.
With this successful repositioning and its
strategy focused on metals needed for economic development and the
energy transition, Eramet is particularly well positioned to take
full advantage of the unique period ahead in a world that will need
more and more metals, and thus to create value in a sustainable
way.
With a portfolio of long-life high-grade
deposits, a robust financial profile, a strategy aligned with macro
trends and an ambitious new CSR roadmap, the Group is poised to
further drive its momentum in this new era of metals.
-
Eramet is well-positioned to become a major player in the
new era of metals and the energy transition
Since 2018, Eramet has executed a successful and
ambitious strategic and managerial transformation to reposition
itself as a pure mining & metals (“M&M”) company and a key
contributor to a sustainable future.
The strategic transformation involved disposing
of non-core metal processing assets and non-performing assets,
while investing in the expansion of attractive and cash-generating
mining activities. CSR has been placed at the heart of the Group's
vision and business model, and the organization has been reviewed
to make it more international and agile, with the skills required
for its repositioning. Safety has been made a priority, and the
Group's accident rate is now recognized as one of the best in the
industry.
As a renewed and strengthened company, Eramet is
entering a unique time in its history. Global economic and
technological trends as well as decarbonization efforts will drive
a strong increase in demand for metals.
In parallel, expectations and ESG standards, in
particular for M&M companies, are increasingly high. These
elevated expectations play a key role in obtaining and keeping a
“license to operate”.
As a result, Eramet has defined and implemented
a balanced strategy, tailored for this new age of metals, and based
on two axes:
- Growing
in metals supporting global economic development,
-
Sustainably developing critical metals for the energy
transition.
This strategy is supported by a new ambitious
2024-2026 CSR roadmap “Act for positive mining”.
-
CSR at the core of Eramet’s strategy
Eramet's first CSR roadmap, launched in 2018,
laid the foundations for the Group to become a reference player in
the responsible mining & metals sector. Since then, Eramet’s
ESG performance has been recognized by leading rating agencies,
with industry leading metrics.
After exceeding expectations in 2022, with a CSR
performance index of 115%, Eramet's corporate social responsibility
is being enhanced with its CSR Roadmap starting in 2024.
“Act for positive
mining”, the new CSR roadmap
A strong objective is at the heart of this new
roadmap: beyond environmental and social management, to create,
wherever possible, a positive impact for the stakeholders and the
ecosystem of the Group, but also to impulse a positive and
responsible mindset internally, focused on the continuous
improvement of practices.
“Act for Positive Mining” is structured
around three ambitions covering the whole span of Eramet’s
responsibilities & interactions:
By protecting the Group’s employees, contractors
and communities, with a strong sense of responsibility and an
ambition for all the subsidiaries to be recognized for their
Diversity & Inclusion approaches by 2035.
-
Protecting the environment, a trusted partner for
nature
By demonstrating diligent and comprehensive
management of the environmental impact of our operations, along
with increased transparency Eramet’s long-term commitment is to act
towards a Net Positive Biodiversity impact.
-
Transform our value chain
Because responsibility pushes us to look beyond
Eramet’s own perimeter and engage its whole value chain on the path
to a sustainable model, pursuing a long-term commitment to reduce
40% of the Group’s CO2 emissions (scope 1&2) by 2035.
“Act for positive mining” is broken down into
ten objectives for the period 2024-2026 (see
Appendix 1), and into three objectives to be met by 2035 that meet
Eramet’s main challenges and are based on industry best
practices.
Furthermore, the implementation of seeking
certification under “IRMA” (the Initiative
for Responsible Mining Assurance), the most stringent
framework across all mining sites, reflects the Group’s strong CSR
commitments and approach.
-
Eramet to continue growing in metals supporting global
economic development
Manganese
Manganese is a large and resilient market driven
by the carbon steel industry dominated by consumption in China at
>50%. Global steel production is expected5 to reach 1.9 bn tons
by 2026 (1% CAGR6 over 2023-2026) on the back of higher demand from
emerging economies (4.5% CAGR over the period), notably in
India.
The steel industry’s push to increase
consumption of high-grade ore for furnace energy and emissions
efficiency and to develop “green streel” products will enable
Eramet to expand its value capture in manganese.
The Moanda mine, operated by Eramet in Gabon, is
the world’s leading high-grade manganese mine. The Group will
further grow and sustain ore production and transportation
capacity, with the following targets:
- Maintaining a
cash cost positioned in the 1st quartile of the cost curve,
- 8.5 Mt of
manganese ore produced and transported per annum by 2026 (targeting
a c. 40% market share in high-grade ore), with capability to
deliver more than 10 Mtpa in the longer-term.
In manganese alloys, Eramet will move to develop
low emissions products to capture value from the “green steel” push
and prioritize a “value over volume strategy”, with the following
2026 targets:
- N°1 in refined
alloys, representing c.50% of the Group’s overall alloys
production, and which demonstrate higher margins than other alloys
products,
- Short term
production targets to be assessed based on market demand and
margins, with up to 800 ktpa capacity,
- Becoming an
alloy supplier of choice for green steel products in Europe and
North America, capitalizing on Eramet’s carbon footprint, already
60% lower than the industry average, and on the future
decarbonization projects of the Group.
Nickel
Demand for nickel is expected7 to rise at 8%
CAGR over 2023-2026, to reach 3.8 Mt in 2026, benefitting from the
resilient growth of stainless steel (representing around two third
of nickel consumption in 2022) and from the strong demand growth
for nickel for batteries (21% CAGR over the same period). By 2032
nickel demand for batteries is expected to surpass demand for
stainless steel.
Indonesia, where the PT Weda Bay Nickel mine is
located, is poised to play a pivotal role in the future of overall
nickel becoming the world’s largest producing country. Today, the
country is already the largest producer of Class II nickel and it
is expected to bring in a mix of Class I nickel options (HPAL &
matte). HPAL (High Pressure Acid Leach) capacities in Indonesia are
expected8 to grow significantly, offering attractive sales
opportunities for PT Weda Bay Nickel’s growing limonite ore
output.
In this context, Eramet and its partner
Tsingshan are focused on unlocking the full potential of Weda Bay,
the world’s largest nickel mine, supplying saprolite and limonite
nickel laterite ores to local Class I & II nickel producers and
benefitting from an attractive pricing with a grade premium. Today
the mine represents around 85 to 95% of PT Weda Bay Nickel’s EBITDA
(with the remainder coming from the operation of a nickel pig iron
plant) with the following 2026 targets:
- Maintaining a
cash cost positioned on the 1st quartile of the curve,
- 60 Mwmt of
nickel ore volumes sold9, of which c.2/3 of saprolite and c.1/3 of
limonite,
- c.15% global
market share in nickel units contained in ore.
Mineral sands
Demand for titanium minerals, of which pigments
represent c. 90% of applications today, and zircon, of which
ceramics represent 50% of applications, is expected10 to increase
at 2.8% CAGR over 2023-2026, notably driven by higher demand for
TiO2 feedstock (incl. ilmenite).
Following the sale of ETI in September 2023, for
an enterprise value of $245m, Eramet is now refocused on its GCO
mining operations in Senegal. With the debottlenecking of the wet
concentration plant as well as higher grade in the area mine, the
Group will further grow its production. Nominal mineral sands (HMC)
production capacity is expected to reach above 1.0 Mtpa by
2026.
-
Eramet sustainably developing critical metals for the
energy transition
Lithium will remain a key metal in the battery
technology for Electric Vehicles and the lithium market demand is
expected11 to grow at an outstanding 20% CAGR over the current
decade and at a double-digit CAGR until at least 2040.
Similarly, demand for nickel class I is expected
to grow at a 12% CAGR over the current decade and at 9% CAGR until
2040, being a key commodity in widely used cathode
technologies.
The Group is successfully executing the
development of its Centenario project. It is also studying
promising mid-term projects to increase its position in battery
metals, notably to leverage on Weda Bay’s and Centenario strong
resource positions and is seeding long-term opportunities through
exploration and innovation.
Our flagship Centenario
project
In partnership with Tsingshan, Eramet has been
developing the Centenario lithium project, with a competitive DLE
technology developed in-house to extract lithium from brines in one
of the most attractive salars in Argentina.
Phase 1 (currently under construction) annual
production capacity is expected at 24kt battery-grade LCE, with
first production in Q2 2024. The cash cost of the project is
positioned on the first quartile of the cost curve of the industry
(c.US$4.5 to US$5.0 k/t LCE). The annual EBITDA for the Phase
1 is estimated between US$210m and US$315m at full ramp-up
(expected to be reached mid-2025), based on a long-term price
assumption ranging from US$15,000 to US$20.000 /t LCE. Total
construction capex is revised to $800m (vs previous capex of
US$735m), reflecting local Argentinian inflation and input costs of
materials, of which c.$480m funded by Tsingshan.
Eramet’s Board of Directors recently approved
the investment decision for the development of the first tranche of
Phase 2 for an additional 30kt LCE per year. This approval remains
subject to obtaining construction permits. Start of production is
expected in Q2 2026 and full ramp-up should be reached by mid-2027,
subject to construction starting in Q2 2024. Cash cost is expected
in line with Phase 1 and capex at c.$800m (at 100%), i.e. a better
capital intensity than Phase 1. Freshwater consumption per unit of
LCE production for Phase 2 is expected to be halved vs. Phase
1.
Longer-term, the overall production capacity of
the Centenario operation is expected above 75ktpa battery-grade
LCE, leveraging on the large resource base in the salar.
In addition to continuing drilling to extend the
Centenario salar resource, Eramine, the local subsidiary of the
Group, is also commencing exploration drilling on the tenements it
holds at the nearby Arizaro salar.
Projects under study
Class I nickel – Sonic Bay in
Indonesia
In partnership with BASF, Eramet has been
developing the Sonic Bay hydro-metallurgical project
(HPAL), intended to produce battery-grade nickel and
cobalt intermediate products (60kt nickel & 6kt cobalt
per year), using laterite ores extracted from the Weda Bay mine. In
view of the progress made in discussions regarding project
execution and funding strategy, the investment decision is now
expected in H1 2024.
EV Battery recycling in Dunkirk’s
“battery valley”
In partnership with Suez, Eramet has been
developing the battery recycling project, that would strengthen the
Group’s position in the electric battery value chain, with a
presence upstream and downstream:
- Upstream
dismantling plant to recover blackmass from Li-ion
batteries (end-of-life or scrap): DFS finalized, FID by
the end of 2023, expected start-up in 2025, with capacity for 50kt
of battery modules to be treated per year,
-
Downstream metal extraction plant: DFS underway
(end-2024), possible start-up in 2027, with capacity for the
recovery of 5kt of nickel, 5kt lithium hydroxide and 1kt of cobalt
per year in battery grade products. The pilot plant designed to
demonstrate the process, located at Eramet Research &
Innovation center, will be inaugurated on Tuesday, November
14th.
Geothermal lithium in
France
Eramet and its partner Electricité de Strasbourg
are assessing the feasibility of extracting lithium from geothermal
brine in Alsace, which would be a very low-carbon intensity
product. Preafeasibilty studies are currently underway. A first
production could be possible by the end of the decade, with an
investment to be decided upon satisfactory results from
studies.
Creating future growth
opportunities
To support future growth, in recent years Eramet
has been establishing an Exploration & Business Development
capability. This unit is actively seeking to acquire and explore
early-stage projects, with a priority on securing future growth
options in lithium, nickel for batteries and manganese.
Acquisition of exploration and mining
concessions in Atacama region, Chile
In support of its strategy to build a portfolio
of future growth opportunities, Eramet’s binding offer for the
acquisition of 120,000 hectares of exploration and mining
concessions was recently accepted by the Chilean company Salares de
Atacama Sociedad Contractual Minera. These concessions are located
in the heart of the Lithium Triangle region of Latin America and
covers a cluster of lithium salars in the Atacama region of
northern Chile.
These undeveloped salars include those of La
Isla, Aguilar, Grande, Las Parinas and Agua Amarga and some of them
are considered to be among the most prospective undeveloped salars
in Chile. Eramet will secure 100% ownership of the concessions
package for an up-front payment of $95m. A later $10m contingent
component would be dependent on the future project’s outcome.
This acquisition marks a key first step in the
Group’s strategy of securing development opportunities in the
Lithium Triangle region. Ownership of the concessions will support
Eramet’s objective to participate in the future development of a
new lithium project. This will be subject to, and likely
facilitated through, future partnerships with parties authorized by
the Chilean government to hold lithium exploration and exploitation
rights.
Eramet is well placed to add value to a future
lithium project through its proven capabilities in lithium brine
salar exploration and project development, as well as through its
strong approach to embedding CSR standards. The Group will also be
able to bring its industry leading in-house DLE technology to any
future project.
Over the 2018-2022 period, Eramet’s current
asset portfolio12 delivered a strong €550m of intrinsic EBITDA
performance, driven mainly by manganese activities and Weda Bay
contribution. Conversely, SLN weighed negatively on the Group’s
intrinsic performance (c.-€160m in the period).
2023 adjusted
EBITDA13 is expected to be around
€800m, including c.€150m of intrinsic
performance, notably reflecting organic growth at Weda Bay
and productivity gains.
The Group is planning to deploy a capex
plan of c.€1.9bn over 2024-2026
(excluding the share of Tsingshan in the lithium project) to
sustain cash-generative assets as well as to fuel its future growth
(c.€900m in 202414, c.€600m in 2025 & c.€400m in 2026). The
breakdown of capex over the period would be as follows:
- Recurring capex:
c.€900m equally split each year,
- Growth capex
related to first axis of the strategic roadmap: €450-550m,
- Growth
investments related to the second axis of the strategic roadmap:
c.$50m for Lithium Phase 1 and c.$400m for Lithium Phase 2 (1st
tranche), excluding the share of Tsingshan in the project.
More robust financially with a 0.2x Adjusted
leverage and high liquidity at the end of 2022, Eramet is targeting
a 1.0x Adjusted leverage on average through the cycle, while
temporarily exceeding this level during the investment period.
Information about the Capital Markets Day
Eramet is hosting its Capital Markets Day today
at 2:00 PM CET in Paris, France, with investors and analysts
attending in-person or by webcast.
The materials presented will be available on the
Eramet’s Investor Relations site after the event.
DISCLAIMER
Certain information contained in this
presentation including any information on Eramet’s plans or future
financial or operating performance and any other statements that
express management’s expectations or estimates of future
performance, constitute forward-looking statements. Such statements
are based on a number of estimates and assumptions that, while
considered reasonable by management at the time, are subject to
significant business, economic and competitive uncertainties.
Eramet cautions that such statements involve known and unknown
risks, uncertainties and other factors that may cause the actual
financial results, performance or achievements of Eramet to be
materially different from the company’s estimated future results,
performance or achievements expressed or implied by those
forward-looking statements. Past performance information given in
this presentation is solely provided for illustrative purposes and
is not necessarily a guide to future performance. No representation
or warranty is made by any person as to the likelihood of
achievement or reasonableness of any forward-looking statements,
forecast financial information or other forecast. Nothing contained
in this presentation is, or shall be relied upon as, a promise,
representation, warranty or guarantee as to the past, present or
future performance of Eramet. Nothing in this presentation should
be construed as either an offer to sell or a solicitation to buy or
sell securities nor shall there be any offer or sale of these
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful under the securities laws of any such
jurisdiction.
Calendar
21.02.2024: Publication of 2023 Group annual results
25.04.2024: Publication of 2024 Group first-quarter turnover
ABOUT ERAMET
Eramet transforms the Earth’s mineral resources
to provide sustainable and responsible solutions to the growth of
the industry and to the challenges of the energy transition.
Its employees are committed to this through
their civic and contributory approach in all the countries where
the mining and metallurgical group is present.
Manganese, nickel, mineral sands, lithium, and
cobalt: Eramet recovers and develops metals that are essential to
the construction of a more sustainable world.
As a privileged partner of its industrial
clients, the Group contributes to making robust and resistant
infrastructures and constructions, more efficient means of
mobility, safer health tools and more efficient telecommunications
devices.
Fully committed to the era of metals, Eramet’s
ambition is to become a reference for the responsible
transformation of the Earth’s mineral resources for living well
together.
www.eramet.com
INVESTOR
CONTACTDirector of Investor
RelationsSandrine Nourry-DabiT. +33 1 45
38 37 02 sandrine.nourrydabi@eramet.com |
PRESS
CONTACT Media relations
managerFanny
Mounierfanny.mounier@eramet.com Image
7Marie ArtznerT. +33 1 53 70 74 31 | M.
+33 6 75 74 31 73martzner@image7.fr |
Appendix 1: 2024-2026 new CSR roadmap
targets
CARE FOR
PEOPLE |
Take care of Health and Safety of people on our
sites |
TF2 <1.0 |
90% of our employees benefit from a Welfare Coverage |
90% of sites have a Well Being programme |
Provide an inclusive environment where everyone and can
grow |
30% of female managers |
1000 “early career contracts” opportunities |
90% of employees with a formal development discussion |
Beyond Eramet activities, accelerate the local and
sustainable development for communities and host
regions |
6,000 jobs voluntarily supported (excluding core business) |
500 young people, 50% of whom come from local communities and
50% girls, supported for qualifying training in secondary or higher
education p |
TRUSTED PARTNER FOR
NATURE |
Control and optimize water consumption to preserve a
quality water resource available to all |
Recycling in water-stressed areas for current or future projects:
60% for GCO and 80% for Lithium project |
100% of sites have a Water management plan including reduction
targets for all sites |
Integrate biodiversity preservation
within all our activities and develop plans towards
an overall net positive contribution to biodiversity
|
Rehabilitation ratio ≥1 |
100% of our mining sites have a Biodiversity Action Plan in line
with IFC Performance Standards |
Mitigate the risks of pollution / Reduce our
environmental impact |
100% of sites have a diffuse dust source map and a reduction action
plan for major sources |
100% of sites, identified as sensitive, have ambient air
quality monitoring at neighboring communities and share
data |
100% of sites have a full water discharge monitoring and share
data |
TRANSFORM OUR VALUE
CHAIN |
Reduce the CO2 footprint
of our value chain |
Reduce emissions per ton produced on scopes 1 & 2 to
0.221 tCO2/t (eq. c.-36% vs. 2019) |
Metallurgy (>80% of scopes 1&2): Develop and validate path
to Near Zero Alloys |
Mine: Reduce by 10% the carbon footprint of our mining
activities |
Bring 67% (in terms of scope 3 emissions) of our suppliers and
customers to commit to reduce their CO2 footprint in line with the
Paris agreement |
Optimize mineral resources and contribute to a circular
economy |
Optimal management and recovery of plant material resources |
Monitor and continuously improve mineral resources valorization
ratio |
Develop a robust technical and economic model to industrially
recycle EV batteries in Europe |
Develop responsible value chain with suppliers and
customers that respect our Human Rights and CSR
requirements |
90% of our suppliers rated at-risk assessed on their CSR practices
by Ecovadis |
100 % of our customers assessed yearly on their compliance with our
CSR or ethical commitments |
100% of sales and purchasing teams trained on ethics every
year |
Audit every mining site - including our Joint ventures -
with IRMA standards |
100% of mining sites have entered into the formal certification
audit |
Appendix 2: Financial
glossary
Consolidated performance
indicators
The consolidated performance indicators used for
the financial reporting of the Group's results and economic
performance and presented in this document are restated data from
the Group's reporting and are monitored by the Executive
Committee.
Turnover at constant scope and exchange
rates
Turnover at constant scope and exchange rates
corresponds to turnover adjusted for the impact of the changes in
scope and the fluctuations in the exchange rate from one financial
year to the next. The scope effect is calculated as follows: for
the companies acquired during the financial year, by eliminating
the turnover for the current period and for the companies acquired
during the previous period by integrating, in the previous period,
the full-year turnover; for the companies sold, by eliminating the
turnover during the period considered and during the previous
comparable period. The exchange rate effect is calculated by
applying the exchange rates of the previous financial year to the
turnover for the year under review.
Adjusted turnover
Adjusted turnover is presented to provide a
better understanding of the underlying operating performance of the
Group's activities. Adjusted turnover corresponds to turnover
including Eramet's share of the turnover of significant joint
ventures accounted for using the equity method in the Group's
financial statements, restated for the off-take of all or part of
the business activity.
As of 30 June 2023, turnover was adjusted to
include the contribution of PT Weda Bay Nickel, a company in which
Eramet owns a 38.7% indirect interest. Eramet owns a 43% interest
in Strand Minerals Pte Ltd, the holding which owns 90% of PT Weda
Bay Nickel and is booked in the Group’s consolidated financial
statements under the equity method. An off-take agreement for
nickel ferroalloys production (NPI) is in place with Tsingshan,
with Eramet holding a 43% interest, and Tsingshan 57%.
A reconciliation with Group turnover is provided
in Note 3 to the Group's consolidated financial statements.
EBITDA (“Earnings
before interest, taxes, depreciation and
amortisation”)
Earnings before financial revenue and other
operating expenses and income, income tax, contingencies and loss
provision, and amortisation and impairment of property, plant and
equipment and tangible and intangible assets.
Adjusted EBITDA
Adjusted EBITDA is presented to provide a better
understanding of the underlying operating performance of the
Group's activities. Adjusted EBITDA corresponds to EBITDA including
Eramet's share of the EBITDA of significant joint ventures
accounted for using the equity method in the Group's financial
statements.
As of 30 June 2023, EBITDA was adjusted to
include the proportional EBITDA of PT Weda Bay Nickel, a company in
which Eramet owns a 38.7% indirect interest. Eramet owns a 43%
interest in Strand Minerals Pte Ltd, the holding which owns 90% of
PT Weda Bay Nickel and is booked in the Group’s consolidated
financial statements under the equity method.
A reconciliation with Group EBITDA is provided
in Note 3 to the Group's consolidated financial statements.
Adjusted leverage
Adjusted leverage is defined as net debt (on a
consolidated basis) to adjusted EBITDA (as defined above), as PT
Weda Bay did not have any external debt during the 2022 and 2023
financial years.
However, in the future, should other significant
joint ventures restated for adjusted EBITDA have external debt, net
debt will be adjusted to include Eramet's share in the external
debt of the joint ventures (“adjusted net debt”). Adjusted leverage
would then be defined as adjusted net debt to adjusted EBITDA, in
compliance with a fair and economic approach to Eramet’s debt.
Manganese ore activity
Manganese ore activity corresponds to Comilog's
mining activities (excluding the activity of the Moanda
Metallurgical Complex, “CMM”, which produces manganese alloys) and
Setrag's transport activities.
Manganese alloys activity
Manganese alloys activity corresponds to the
plants that transform manganese ore into manganese alloys. It
includes the three Norwegian plants comprising Eramet Norway
(“ENO”, i.e., Porsgrunn, Sauda, and Kvinesdal), Eramet Marietta
(“EMI”) in the United States, Comilog Dunkerque (“CDK”) in France
and the Moanda Metallurgical Complex (“CMM”) in Gabon.
Manganese ore FOB cash cost
The FOB (“Free On Board”) cash cost of manganese
ore is defined as all production and overhead costs (R&D
including exploration geology, administrative expenses, sales
expenses, overland transport expenses), which cover all stages of
ore extraction through to shipping to the port of shipment and
loading, and which impact the EBITDA in the company's financial
statements, over tonnage sold for a given period. This cash cost
does not include sea transport or marketing costs. Conversely, it
includes the mining taxes and royalties from which the Gabonese
state benefits.
SLN’s cash cost
SLN’s cash cost is defined as all production and
overhead costs (R&D including exploration geology,
administrative expenses, logistical and commercial expenses), net
of by-products credits (including exports and nickel ore) and local
services, which cover all the stages of industrial development of
the finished product until delivery to the end customer and which
impact the EBITDA in the company’s financial statements, over
tonnage sold.
Appendix 3: Footnotes
1 Subject to construction permitting.2 HMC: Heavy Mineral
Concentrate.3 LCE: Lithium Carbonate Equivalent.4 Growth capex
related to manganese and mineral sands organic growth and for
Lithium Phases 1 and 2 - 1st tranche.5 Source: Eramet internal
market analysis based on public information.6 CAGR: Compound Annual
Growth Rate.7 Source: Eramet internal market analysis based on
public information.8 Source: Eramet internal market analysis based
on public information.9 External sales (high and low grade) and
internal consumption (for the NPI production)10 Source: TZMI
Supply-Demand September 2023.11 Source: Eramet internal market
analysis.12 Excluding notably Aubert & Duval, Erasteel and
Sandouville; including ETI, divested end-September 2023.13 See
definition in Financial Glossary in Appendix 214 Including €50m
financed by Tsingshan for Centenario Phase 1.
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