[Ferro-Alloys.com] Eramet Manganese Activity and Performance in FY24

Christel Bories, Eramet group Chair and CEO:

2024 was a difficult year, notably marked by a still unfavourable market environment and con-straints on our production volumes, but we were able to respond by adapting our production and controlling our costs. We were also able to seize the opportunities presented by this low point in the economic cycle by regaining full ownership of our lithium assets in Argentina, where we successfully started production at the Centenario plant.

The strategy and transformation we have implemented over the last eight years are paying off: To-day, Eramet is a much more financially robust mining and metals company, with world-class mining assets, recognised for its commitments to responsible mining and now well positioned to take ad-vantage of the boom in metals linked to the energy transition.

In 2025, against an unstable and complex economic and geopolitical backdrop, we will remain fo-cused on ramping up Centenario and on the operational performance of each of our sites, while continuing our actions to promote responsible mining through our “Act for Positive Mining” roadmap.

In view of the progress achieved with all of our teams, I know that we will be able to overcome these new challenges. It is therefore with confidence that I will hand over my executive functions to our new Chief Executive Officer, Paulo Castellari, on 27 May, and that I will continue to support the Group’s strategic transformation as Chairwoman.

Manganese

EBITDA for the Manganese activity was €563m in 2024, up 13% year-on-year.

Ore volumes sold externally were down -7% over the year, with a strong decline in Q3 versus Q2 (-20%), factoring in the downturn in the Chinese market which significantly weighed on demand for high-grade manganese leading to a 3-week suspension of production in Q4 at the Moanda mine, in order to limit the market imbalance.

However, EBITDA for the manganese ore activity was slightly up to €455m (+3%), with the decrease in volumes sold more than offset by the increase in average realised selling prices (+9% vs. 2023), albeit below the increase of the 44% CIF China index (+15%) reflecting the weak level of sales in Q3.

EBITDA for the manganese alloys activity strongly increased to €108m (+96%), reflecting the significant decrease in input costs, combined with rising selling prices over the year.

Market trends & prices

Global production of carbon steel, the main end-product for manganese, was 1,883 Mt in 2024, almost stable year-on-year (-1%).

China, which accounts for more than half of global steel production, posted a limited decline of around 2%, albeit with a decline of 10% in H2 versus H1. Production in North America also posted a decline of 2% for the year, while Europe ended the year with a 1% increase compared to an his-torically low 2023. India continued to outperform, with a 6% increase in production.

Manganese ore consumption declined significantly in 2024 (-6%) to reach 19.6 Mt-Mn, impacted in H2 by the decline in steel production and the consumption of ore stocks in China. Global manga-nese ore production also declined significantly in 2024 to 18.8 Mt-Mn (-9%), reflecting the decrease in volumes from Australia (-64%, impacted by Cyclone Megan in March) and from Gabon (-11%, following the suspension in production in Moanda in Q4), which was partly offset by the Q2 and Q3 inflow of semi-carbonated ore from South Africa (+13%) which represented nearly 50% of seaborne production in 2024.

As a result, the manganese supply/demand balance was again in deficit at year-end. Chinese port ore inventories strongly decreased in Q4 2024, reaching 5.2 Mt at end-December (vs. 5.9 Mt at end-September), equivalent to 8 weeks of consumption.

The price index (CRU) for manganese ore (CIF China 44%) averaged $5.5/dmtu in 2024, up 15% from 2023. This trend reflects a strong increase between April and July, with a peak at $9/dmtu, following the prolonged shutdown of a mine in Australia, but masks the decline in prices from mid-August (averaging $4.1/dmtu in Q4 2024, i.e., -44% vs. Q3) due to the downturn in the market, notably in China.

The price index (CRU) for refined alloys in Europe (MC Ferromanganese) averaged a slight in-crease of 2% versus 2023, while the price index for standard alloys (Silicomanganese) was up by 13%, in line with those of ore.

Activities

In Gabon, the volumes of ore produced and transported were down 8% over the year (-53% and -37% respectively in Q4 2024 vs. Q4 2023), while volumes sold externally in 2024 decreased by 7%.

The strong decline in carbon steel production in China during the summer led to a significant de-crease in manganese ore purchases by Chinese manganese alloys producers, concurrent with a sudden increase in the supply of semi-carbonated ore, mainly produced in South Africa. This situa-tion resulted in a major market imbalance which significantly weighed on the Group’s sales, as well as leading to the suspension of production at the Moanda mine for 3 weeks in Q4, in order to control stocks and transportation. Loading difficulties at the port also had a negative impact on ore ship-ments and sales at the end of the year.

The FOB cash cost2 of manganese ore activity was $2.2/dmtu, up 12% on 2023, mainly reflecting the decrease in volumes sold. It should be noted that Comilog's FOB cash cost definition was up-dated to exclude mining taxes and royalties (paid to the Gabonese State), which are considered to be non-controllable, and were $0.2/dmtu in 2024 (stable vs. 2023).

Conversely, sea transport costs per tonne were up 11% to $1.0/dmtu compared to 2023, due to the increase in freight rates.

Manganese alloys production was stable, in line with the “value over volume” strategy implemented to adapt to market conditions. Manganese alloys sales were also almost stable (-1%), with a slightly more favourable mix versus 2023 (54% of refined alloys).

The manganese alloys margin improved year-on-year, reflecting increased selling prices as well as the marked decline in the cost incurred for reductants, notably metallurgical coke. The impact of rising manganese ore prices was limited over the year owing to the optimization of manganese ore purchases (outside of price soaring periods).

Outlook

Global carbon steel production is expected to remain stable in 2025, with a decrease in Chinese production, offset by an increase for the rest of the world. In particular, India, where Eramet has a strong business footprint, is expected to continue posting a significant increase in its production thanks to new installed capacity, infrastructure investments from the State and continued growth in demand from other steel-consuming sectors.

As a result, demand for manganese ore should also remain stable over the year. Manganese ore supply is expected to decline in H1, with the expectation of a slight deficit versus demand in the first half of 2025.

The market consensus, which is currently set around $4.5/dmtu on average for 2025, with a lower H1 than H2, reflects a decline of close to 19% in the manganese ore price index (CIF China 44%) compared with 2024. This decline, calculated on the basis of Eramet’s average realised selling prices in 2024, is still less marked, given the low volumes of high-grade ore sold at a time when prices were high.

Demand for alloys should be relatively stable in 2025, as should supply. However, flows could be significantly disrupted by new protectionist measures (particularly in Europe and the United States). Alloys selling prices are expected to decline in 2025.

Production at the Moanda mine, with its capacity above 8 Mt, will be adjusted according to market conditions and transported ore volumes should reach between 6.7 Mt and 7.2 Mt in 2025. The FOB cash cost1 is expected to decrease from 2024, between $2.0 and $2.2/dmtu.

The last tranche of investments aiming to sustain the mine’s production capacity and strengthening that of transport is estimated at around €130m in 2025. It will also enable an improvement in opera-tional efficiency.

Factoring in the restart of the furnace at the Dunkirk plant in early January, alloys production and sales should increase over the year.

Guidance

Quarterly turnover

Productions and shipments

Price and index

• [Editor:tianyawei]