Acquisition of Eramet: “The French State could not let such a nugget slip away” says Philippe Chalmin
While the Financial Markets Authority grants an exemption to the French State to increase the capital of Eramet without resorting to a takeover bid, Philippe Chalmin, economist, professor at Paris-Dauphine and expert…
LA TRIBUNE - Is the choice of the French State to acquire a stake in Eramet a good decision?
PHILIPPE CHALMIN - Let's be honest, Eramet is the only French player in the mining sector. There is certainly Orano but it is totally focused on uranium and it is a slightly different business. Eramet is the only one, in a world where very large models – including the big four of BHP, Rio Tinto, Glencore and Vale – operate, a few intermediate-sized players as well as Chinese groups. Eramet is practically the only mining player not only French, but also European.
To my knowledge there is no large German or Italian mining group. I believe that there are no longer any British players, BHP and Rio Tinto being rather Australian. Glencore has its official headquarters in Switzerland. Vale is Brazilian. Eramet is therefore, somewhere, an instrument, in my opinion fundamental, of a certain French sovereignty. We couldn't let him slip away. Eramet is the fruit of an old story. We have already lost Pechiney, (absorbed by Alcan in 2003, Editor's note), which was of another size, and which disappeared body and property. We should not let Eramet slip away, that is obvious to me.
Eramet has already experienced upheavals in the past…
The State inherited this stake, which was initially carried by Areva. At the time, Eramet was valued mainly for its nickel activity. Already, there was no question of letting go of Eramet, whose stake was notably nickel in New Caledonia. This is how the Strategic Investment Fund (FSI) recovered Areva’s stake in Eramet. The group then experienced the merger with Aubert & Duval, which was not a huge success. Finally, Eramet refocused. The group has developed nickel in Indonesia and the Philippines, manganese in Gabon – the Gabonese state wants to regain control, we will see what happens… - and it has invested heavily in lithium in Argentina. This was the source of its problems, but the strategy was not absurd: practically all the other players, BHP in particular, also invested heavily in lithium. The lithium market is currently going through a low period, with overproduction, but, in the long term, this investment may make sense. Under these conditions, the French state probably could not do otherwise. There was no question of letting this nugget slip away, which is returning to the fold of the French public interest.
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