Eramet to increase stake in Weda Bay nickel project

By Alexander Ginting

French mining giant Eramet SA said that Mitsubishi Corporation had on April 21 exercised a put option to the French mining giant in the stake the Japanese firm holds with Pacific Metals Co Ltd (Pamco) in Strand Minerals Pte Ltd, which holds a 90 percent interest in the Indonesian PT Weda Bay Nickel (WBN), which owns the giant Weda Bay nickel concession in Halmahera, North Maluku.

?In accordance with the rules of the agreement between Strand Minerals Pte Ltd?s shareholders, Eramet will acquire Mitsubishi Corporation and Pamco?s ownership interests (in WBN). This transaction has no impact on the group?s income statement. Eramet will become a 100 percent shareholder in Strand Minerals Pte Ltd. The Eramet group?s net debt will increase by nearly ?100 million as a result of this transaction,? Eramet said in a first quarter 2016 financial report seen Saturday.

Eramet owns 66.6 percent of Strand Minerals, while Mitsubishi has 30 percent stake, and Pamco 3.4 percent.

The Weda Bay deposit is one of the largest nickel deposits in the world. Its measured, indicated, and inferred resources are valued at more than 9.3 million tons of nickel, an increase of more than 5 million tons compared with estimates made when Eramet acquired Weda Bay in May 2006. IDX-listed mining firm PT Aneka Tambang Tbk holds a 10 percent stake in WBN.

?However, due to a significant downturn in metal markets, it should be remembered that the Eramet group?s major projects, including Weda Bay, are currently suspended,? the French company said.

Eramet suspended in 2014 the planned multi-billion dollar Weda Bay nickel mining and smelter project in the wake of the nickel downturn.

Editing by Reiner Simanjuntak