Eramet Shares Plunge 19% as Nickel and Manganese Production Targets Slashed Amid Indonesian License Cuts

Jakarta, CNBC Indonesia – Shares in French mining group Eramet fell 19% on Wednesday as the company announced cuts in nickel and manganese production targets.

Referring to the Financial Times, this is a blow to the mining business group listed on the Paris Exchange that had previously suffered from the fall in global nickel prices. Before that, the global nickel market had been depressed by the rapid increase in the production of the low-cost metal in Indonesia.

Companies owned by groups based in China have led to an oversupply of nickel and greatly reduced prices.

Eramet’s shares have fallen by around 50% since June 2024, largely hit by a drop in nickel prices, which have fallen to around $17,395 per ton, from $30,000 at the end of 2022.

Eramet said late on Tuesday that the Indonesian government had issued “much fewer” operating and sales licenses than it had hoped to allocate in 2024.

In addition, Eramet also expects reduced production for manganese ore, which is used in the production of carbon steel. Previously, a fall in nickel prices had forced companies including First Quantum and BHP to suspend production at several mines.

This year, Swiss mining company Glencore also announced plans to sell its stake in a nickel mine in New Caledonia.

Eramet, a French group company, has operations in Weda Bay, Indonesia, one of the world’s largest nickel mines, and its presence there has helped counter the problems of the company in the New Caledonia region, which suffered closures and loss of production.

Analysts say that the reduction in licenses issued by the Indonesian government is creating significant tension in the market. They said Chinese nickel group Tsingshan, Eramet’s partner in Indonesia, had also recently announced production cuts.

(fsd/fsd)