London 13/07/2016 - The board of Eramet’s Société Le Nickel (SLN) has approved a 200-million-euro ($221 million) loan deal proposed by the French government, paving the way for operations to continue at the New Caledonian nickel producer.
The eight-year loan will be provided to SLN at a minimum rate of four percent, supplemented by progressive remuneration indexed to the EBITDA (earnings before interest, tax, depreciation and amortisation) margin, Eramet said in a statement on Tuesday.
The latest loan will be made directly to SLN rather than to STCPI, an investment vehicle for three Caledonian provinces - the 34-percent shareholder of SLN had rejected an initial loan proposal made by French Prime Minister Manuel Valls in April during his visit to the French territory.
“I’m very pleased that a solution has been found with the French government to continue financing SLN and its turnaround in the extremely difficult market conditions that the nickel industry has experienced for a number of years,” Patrick Buffet, chairman and CEO of Eramet, said in the statement.
Eramet, which owns 56 percent of SLN, has provided 190 million euros of extra financing since late last year to ensure SLN’s survival during the nickel price slump.
In May, Eramet had also announced plans to lower cash production costs at SLN by 25 percent – compared to 2015’s average - to $4.50 per pound by end-2017.
Eramet’s nickel sales volume - which includes ferronickel and nickel matte - slipped 7.9 percent year-on-year to 12,392 tonnes in the first quarter of this year.