Eramet PESTLE Analysis

Eramet is exposed to the growing trend of resource nationalism, a prime example being Gabon's decision to ban crude manganese exports from 2029. This policy is designed to boost domestic processing capabilities, forcing Eramet to re-evaluate its long-term investment plans in the country.

Such government-led initiatives directly impact global supply chains for critical raw materials like manganese, a key component in steel production. In 2023, manganese prices saw fluctuations, with benchmarks like the Chinese import price for high-carbon ferromanganese trading around $1,100-$1,200 per tonne, illustrating the sensitivity of the market to supply-side disruptions.

Political stability in Eramet's operating regions is critical, with events like social movements in Gabon in 2023 impacting manganese ore sales due to port disruptions. Similarly, New Caledonia's ongoing political tensions create uncertainty for nickel operations, affecting long-term investment strategies.

Governments are increasingly prioritizing secure supplies of critical minerals for the energy transition, offering supportive policies and incentives. Eramet's lithium project in Argentina and nickel operations in New Caledonia are strategically positioned to benefit from this trend, aligning with global efforts to ensure raw material availability for sectors like electric vehicles.

The global push for energy transition, evidenced by the projected over 20 million annual EV sales by 2025, directly enhances the strategic importance of metals like nickel and lithium. Eramet's investments in these commodities are thus well-aligned with national and international energy security objectives.

Resource nationalism is a growing concern, exemplified by Gabon's planned ban on crude manganese exports from 2029 to foster domestic processing. This policy forces Eramet to adapt its long-term investment plans and highlights the impact of government-led initiatives on global supply chains.

Currency exchange rate fluctuations, particularly the Euro's movement against the US Dollar, directly influence Eramet's reported financial results and operational expenses. For instance, a stronger dollar can make Eramet's dollar-denominated costs higher when translated back into Euros.

Positive currency impacts can sometimes cushion the blow from weaker sales volumes or lower commodity prices. Eramet noted such a benefit in Q1 2025, where favorable exchange rates helped offset other pressures.

Conversely, unfavorable currency trends can lead to increased cash costs for the company, thereby eroding its overall profitability. This highlights the sensitivity of Eramet's financial performance to global currency markets.

Eramet's performance remains closely linked to global commodity prices, with nickel and manganese facing a challenging market in early 2025. While manganese prices are showing a slow recovery, overall market uncertainty persists, directly impacting Eramet's revenue. China's industrial output, a key driver for commodity demand, will be crucial in 2024, with global growth forecasts around 2.7%. Currency fluctuations, particularly the Euro against the US Dollar, also significantly influence Eramet's financial results and costs.

Eramet plays a crucial role in job creation across its operational regions. In 2023, the company directly employed approximately 13,000 people globally, with a significant portion of these roles located in its key territories.

Beyond direct employment, Eramet actively fosters indirect job creation and provides valuable training opportunities. Initiatives focused on supporting youth and women aim to promote economic diversification and address local inequalities, as seen in its operations in Gabon and New Caledonia, where its activities are a major source of local livelihoods.

Eramet's commitment to local development is evident in its job creation efforts, supporting approximately 14,000 direct and indirect jobs in host communities in 2023. The company's 'Act for Positive Mining' roadmap emphasizes local hiring and infrastructure improvements, directly enhancing living standards.

The company prioritizes workforce well-being through its 'Global Care' agreement, offering a unified social protection floor and health initiatives. Eramet also focuses on early career development, with internships and graduate programs designed to cultivate future talent.

However, social movements can significantly disrupt operations, as seen in the March 2025 Owendo port incident in Gabon, which impacted logistics and exports. This highlights the critical need for robust community engagement to mitigate financial risks from labor disputes and social activism.

Eramet is pushing forward with new technologies to make its metal production greener. They've successfully tested using materials from plants, like biomass, instead of coal to reduce metals. This is a big step towards cutting down their carbon emissions.

These trials are a core part of Eramet's strategy to shrink its environmental impact. For example, in 2023, their Scope 1 and 2 greenhouse gas emissions were 3.4 million tonnes of CO2 equivalent, and they aim to reduce this significantly through such innovations.

Investing in cleaner ways to produce metals isn't just good for the planet; it's crucial for Eramet's future. Meeting stricter environmental rules and customer demands for sustainable products means these technological shifts are vital for staying competitive and achieving their 2030 climate goals.

Eramet is leveraging advanced technologies like Direct Lithium Extraction (DLE) for more efficient and environmentally sound lithium production, crucial for the booming EV market. By 2025, battery applications are expected to drive over 80% of global lithium demand, highlighting the importance of these innovations.

The company is integrating AI and connected devices into its mining operations to boost efficiency and reduce environmental impact. Drones are also employed for site monitoring, enhancing operational safety and data collection for better resource management.

Eramet is also exploring biomass as a substitute for coal in metal production to lower carbon emissions, a key part of their strategy to meet 2030 climate goals. In 2023, their Scope 1 and 2 emissions were 3.4 million tonnes of CO2 equivalent.

Furthermore, Eramet is investing in battery recycling technologies to support the circular economy, despite some project delays. This aligns with the growing demand for sustainable resource management and the energy transition.

Eramet faces significant legal challenges from export bans and trade restrictions. Gabon, a key supplier for Eramet's manganese, has signaled a potential crude manganese export ban starting in 2029, aiming to boost domestic processing. This policy shift requires Eramet to adapt its supply chain and investment strategies to align with national industrialization objectives.

These governmental decisions create uncertainty and necessitate proactive planning to mitigate risks. The evolving global trade landscape, marked by increasing protectionist measures, introduces substantial market volatility. For instance, in 2023, several countries considered or implemented restrictions on critical mineral exports, impacting global supply chains and commodity prices.

Eramet's operations are heavily influenced by evolving legal frameworks governing resource extraction and trade. Indonesia's refined RKAB requirements for nickel ore, for instance, directly impact production and financial outcomes, with the Ministry of Energy and Mineral Resources actively managing resource management and environmental compliance. Gabon's consideration of a crude manganese export ban from 2029 onward necessitates strategic supply chain adjustments to align with national industrialization goals.

The company must navigate complex environmental regulations, with all mining sites pursuing certifications like ISO 14001 and IRMA, aiming for 100% coverage by 2025. Eramet also provides financial guarantees for environmental restoration, as seen with SLN in New Caledonia, where regulatory disputes over these obligations create significant financial and operational risks. Agreements with state entities are sometimes necessary to ensure continuity amidst these challenges.

Eramet's commitment to transparency is reinforced by EITI compliance, ensuring public disclosure of government payments. Its comprehensive ESG reporting, detailing progress on emissions reduction and water consumption, is vital for stakeholder trust and regulatory adherence. For example, in 2023, 90% of Eramet's mining operations were covered by its environmental management system, a key step towards its 2025 target.

Eramet is actively engaging in biodiversity preservation, demonstrated by its involvement in initiatives like the 'It's Now for Nature' campaign and open innovation challenges focused on ecological protection. This commitment reflects a growing awareness of the need to integrate environmental stewardship directly into operational planning.

Recognizing the significant water demands of mining, particularly in water-scarce environments, Eramet prioritizes the implementation of water conservation technologies. For example, in arid regions such as the Atacama Desert, these technologies are crucial for minimizing the ecological footprint and ensuring sustainable water use.

Eramet's environmental strategy is deeply integrated into its 'Act for Positive Mining' roadmap, focusing on positive ecological outcomes. The company's commitment is evidenced by its sustained Silver rating from EcoVadis in 2023, highlighting strong CSR practices.

Decarbonization efforts are central, with trials of bio-reducing agents aiming to cut Scope 1 and 2 CO2 emissions. Biodiversity preservation is also a priority, seen in initiatives like the 'It's Now for Nature' campaign.

Eramet is implementing water conservation technologies, particularly in arid regions like the Atacama Desert, to manage its water footprint. Furthermore, the company is actively pursuing battery recycling, tapping into a market projected to reach $37.2 billion by 2030.