French mining group Eramet on Thursday raised its full-year earnings target as it saw supply tensions keeping metal prices high and offsetting increased production costs.
Market conditions remained favourable at the start of the second quarter although geopolitical uncertainties could weigh on demand, particularly in the second half of the year, Eramet said in a quarterly sales update.
The group forecast earnings before interest, tax, depreciation and amortisation (EBITDA) in 2022 of more than 1.5 billion euros ($1.58 billion), up from an initial target of around 1.2 billion euros given in February.
Russia’s two-month-old invasion of Ukraine has fuelled metal price volatility, including by disrupting access to nickel from Russia and manganese and titanium products from Ukraine, Eramet said.
Soaring prices helped cushion rising input costs, notably for energy that swelled production costs for Eramet’s SLN nickel unit in New Caledonia and its TTI plant in Norway, it said.
The company reported first-quarter sales of 1.2 billion euros, up nearly 80% from a year earlier.
It confirmed previous targets to raise further mine output of manganese and nickel in Gabon and Indonesia, respectively, and increase nickel ore exports from New Caledonia.
Eramet has been shifting its focus from supplying the steel industry towards making minerals for electric vehicle batteries, including through a lithium mine project in Argentina.
($1 = 0.9521 euros)
(By Gus Trompiz; Editing by Kim Coghill)