French mining and metallurgical group Eramet reported a significant recovery in its first-half 2026 financial performance, with adjusted EBITDA excluding its loss-making New Caledonian subsidiary SLN rising 45% to €276 million, driven primarily by lithium and manganese activities. The results, published on July 29, 2026, also shed light on the mounting operational challenges facing the group's Indonesian nickel operations amid tightening regulatory constraints. The group's adjusted turnover excluding SLN reached €1,649 million in the first half of 2026, up 8% year-on-year, reflecting a positive price effect of 9% and a favourable volume effect of 5%.
At constant scope and exchange rates, the increase was 14%, though a currency headwind of -6% tempered the reported gain. Nickel Division: Rising Prices Offset by Permit Constraints Eramet's nickel division, which operates through its 38.7% stake in PT Weda Bay Nickel (PT WBN) in Indonesia, reported adjusted EBITDA of €56 million for the half-year, up 10% year-on-year. PT WBN's own EBITDA contribution, excluding the off-take contract, also came in at €56 million, a 2% increase, reflecting higher realised selling prices driven by LME appreciation and elevated premiums.
However, these gains were largely offset by a 15% decline in volumes and increased production costs. The key operational challenge for the Indonesian nickel business in the first half of 2026 centred on the country's RKAB permitting system. PT WBN received an initial annual production and sales quota of only 12 million wet metric tonnes (Mwmt) of nickel ore for 2026, including 3 Mwmt designated for internal sales.
This represented a reduction of more than 70% compared to the RKAB initially granted in 2025, which stood at 32 Mwmt and was subsequently revised upward to 42 Mwmt during that year. External ore sales totalled 9.4 Mwmt in the first half of 2026, down 15% year-on-year. After reaching the initial RKAB quota, PT WBN placed its mining operations into care and maintenance in May 2026.
The NPI plant continued to operate normally during this period, producing 16.7 kt of nickel, down 2%, while off-take contract sales remained broadly stable at 7.1 kt-Ni. Saprolite and limonite ore sales showed contrasting trends. External saprolite sales fell 31% to 5.7 Mwmt, with the average grade declining moderately to 1.5%.
Limonite sales, conversely, rose 36% to 3.7 Mwmt. PT WBN continued to benefit from premiums exceeding 100% on its high-grade saprolite, against the backdrop of persistent domestic supply restrictions. In June 2026, PT WBN reached a settlement agreement with Indonesian authorities regarding forestry permit proceedings initiated in September 2025.
This resulted in a provision of approximately €34 million representing Eramet's 38.7% share, which pushed the joint venture into a net loss for the period. Permit Review and Second-Half Outlook In July 2026, PT WBN filed a request with Indonesia's Ministry of Energy and Mineral Resources (ESDM) to revise its initial 2026 RKAB upward, a move described by Eramet as consistent with the mine's production capacity and with authorisation levels granted in previous years. The request was motivated by the growing ore needs of the IWIP industrial park, estimated at more than 110 Mwmt per year, which significantly exceed current authorised volumes.
The Weda Bay mine is expected to remain in care and maintenance pending the outcome of this review. For the second half of 2026, Eramet projects that demand for primary nickel will continue to grow, supported by stainless steel production in China and India, as well as increasing demand from nickel-based battery manufacturers. On the supply side, primary nickel production is expected to gradually recover, although HPAL plants are anticipated to face significant disruptions in the third quarter due to rising sulphur prices.
The market consensus for LME nickel prices in the second half of 2026 currently averages approximately $17,650 per tonne, according to Eramet's analysis based on a panel of sell-side and market analysts. Depending on regulatory developments in Indonesia, the nickel market could move closer to rebalancing, though Eramet expects it to remain in deficit overall for 2026. Market prices for nickel ore in Indonesia are expected to trend positively, supported by high nickel prices and the introduction of a new HPM pricing formula, amid continued domestic ore supply tensions.
Group Financial Overview At the group level, net income attributable to shareholders was a loss of €195 million in the first half of 2026, compared to a loss of €152 million in the same period of 2025. The deterioration was primarily driven by a €112 million impairment charge on mineral sands assets following a fire at the Eramet Grande Côte site in Senegal in February 2026 and a subsequent review of mineral reserves. SLN, Eramet's New Caledonian nickel subsidiary, contributed losses of €49 million to the group result.
Capex financed by the group fell sharply to €100 million in the first half, down 53% compared to the first half of 2025, reflecting strict capital discipline. Adjusted free cash flow turned positive at €7 million. Net debt, restated for SLN's net cash position, stood at €2,046 million at June 30, 2026, broadly stable compared to December 31, 2025.
Eramet's long-term credit ratings stand at B2 at Moody's with a stable outlook, and B at Fitch with a negative outlook, following Moody's downgrade in March 2026. Lithium Momentum The lithium activity, centred on the Centenario Direct Lithium Extraction plant in Argentina, delivered EBITDA of €61 million in the first half of 2026, emerging as a key growth driver for the group. The plant reached an average of 90% of nameplate capacity in June, one year after start-up.
Production volumes totalled 8,440 t-LCE for the half-year. Eramet reiterated its full-year guidance of between 17,000 and 20,000 t-LCE for 2026. The market consensus for battery-grade lithium carbonate CIF Asia stands at approximately $23,100 per tonne for the second half of 2026.
All financial data cited in this article are sourced from Eramet's 2026 Interim Financial Report, approved by the Board of Directors on July 29, 2026, and reviewed by statutory auditors KPMG and Grant Thornton.
Source: eramet.com