[annual report of the Mine] Eramet Manganese Ore production is expected to increase by 4 per cent year-on-year in 2018 to 7 million tons in 2023

SMM2, 25 March: recently, Ehrman Group (Eramet) recently released its 2018 results, which showed that thanks to the rise in metal prices, the company's sales in 2018 increased by 5% to 3.825 billion euros. The company produces 4.3 million tons of manganese ore in 2018 and aims to produce 4.5 million tons of manganese ore in 2019, which is expected to increase to 7 million tons by the end of 2023.

Ehrman's financial situation:

Key business data:

"Click to view data sources & related article: SMM" Ehrman: revenue of 580 million euros in 2018 dragged down by nickel and alloys

Manganese business:

Sales of the company's manganese business (excluding mining activities) accounted for 49 per cent of total sales in 2018, up 2 per cent from 2017 to 1.857 billion euros. Despite the rebound in ore prices, current revenues fell 3 per cent to 699 million euros as manganese margins squeezed.

Global production of carbon steel, the main end product of manganese, set a new record of 1802 million tons in 2018, an increase of 4.4 percent over 2017. This growth is driven not only by Chinese demand (+ 6.6 per cent), which accounts for about 52 per cent of global production, but also by India (+ 4.9 per cent) and North America (+ 4.1 per cent). Driven by new regulations, China's demand for manganese has increased, and these regulations tend to require more manganese to produce higher quality steel.

In order to meet the strong demand for ore, all global producers are operating at full capacity, with a slight surplus in market production at the end of the year. By the end of 2018, ore stocks in Chinese ports had reached 3.1 million tons, an increase of 1.3 million tons over the same period last year.

In 2018, the average price of 44 per cent (CIF) of manganese ore in China remained at $7.1612 per dry tonnage for the whole year, an increase of 20 per cent over 2017. However, the increase in manganese mine sales did not fully reflect the rebound in the average spot price in the manganese market during the year, especially given the negative impact of the 2018 euro / dollar exchange rate on 2017.

In, Comilog (Camelao, Gabon, a new ore production record of 4.3 million tons was set in 2018, an increase of 4 per cent over 2017. Despite the progress made in railway logistics, as a result of seven derailments during the year, two of which involved Comilog trains, the volume of ore transported reached only 4 million tons, while external sales of ore increased by 2 per cent to 3.4 million tons over the same period.

In 2018, the price of manganese alloy in Europe fell compared with 2017, in particular the price of refined Ferro manganese (- 12 per cent), reflecting the continued squeeze on profits for manganese alloy, which also had an impact of 133 million euros on 2018 performance. In 2018, the company's manganese alloy production totaled 720000 tons, sales increased to 703000 tons, and refined manganese ferroalloy sales increased to 313000 tons (+ 6 per cent).

In 2018, Eramet continued to conduct a detailed feasibility study to expand the Moanda mine in Gabon. By the end of 2023, the target production will reach 7 million tons, an increase of more than 50 per cent over 2018, thanks to the development of the Okouma Plateau and the Bangomb é Plateau, which is currently in operation. Over the next five fiscal years, the company expects total investment to be close to 600 million euros, with a final decision to be made by the time the technical and economic research is completed in the spring of 2019.

Against this background, at the end of 2018, part of the Bangomb é plateau ore will be processed by another dry mineral processing process, which will provide flexibility for the operation of the Moanda mine by extending the life of the currently operating plateau, and it will also increase production in the short term. On this basis, without significant investment, the production target for 2019 has been set at 4.5 million tons of manganese ore, reflecting an important milestone in the organic growth of Comilog.

The railway renovation plan supports this growth momentum, which will double the railway transport capacity of Transgabonese. The Transgabonese railway, operated by Setrag, a 100 per cent subsidiary of Comilog, has increased capacity by 30 per cent since the launch of the plan in 2016. 2019 will be a new milestone in the transformation plan, especially in the area of digital transformation, where the new testing centre is equipped with mobile digital communications resource trains.

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