Eramet is in “very advanced talks” with the French government to remove from its balance sheet several hundred million euros of debt related to its loss-making nickel subsidiary SLN in New Caledonia, the mining group said.
The company’s talks with the French authorities are part of wider negotiations to rescue the struggling nickel industry in New Caledonia.
Eramet, which has refused to inject more funds into SLN, aims to reach a deal in the coming weeks with France to remove some 320 million euros ($345.82 million) of SLN’s debt from its own balance sheet, Chair and CEO Christel Bories told reporters on Wednesday, declining to give further details.
The debt included a new 60-million-euro loan granted to SLN by the French government this month which should enable SLN to continue operating at least until April, Bories said on a results call.
The debt discussions between Eramet and the government were separate to the broader talks over the New Caledonian industry and Eramet remained open to different longer-term options for SLN, the CEO said.
“We cannot in the meantime continue to accumulate debt, which we are not financing ourselves, on Eramet’s balance sheet,” she said.
France’s finance ministry did not immediately respond to a request for comment.
France has also offered loans to help avert the collapse of New Caledonia’s two other nickel processing firms, Koniambo Nickel SAS (KNS) and Prony Resources.
KNS’ co-owner Glencore, however, this month halted output at the KNS processing plant while it seeks a buyer for its stake.
Eramet reported a sharp drop in annual earnings reflecting weak metal prices. It recorded a 218-million-euro asset impairment related to SLN.
SLN’s troubles have contrasted with profitable growth for Eramet’s nickel business in Indonesia, where it runs the Weda Bay mine with Chinese steel group Tsingshan.
Turning to a project with German chemical group BASF to process ore from Weda Bay into nickel and cobalt for battery supply chains, Bories said Eramet continued to study technical options but was no longer able to give a timeline.
($1 = 0.9253 euros)
(By Gus Trompiz; Editing by Benoit Van Overstraeten and Timothy Heritage)
