* Nickel losses push French miner into red in 2013
* Delays Weda Bay project, says Indonesia key to nickel
* Proposes no dividend, plans cuts to capex, costs
(Writes through with details, comments from presentation)
By Gus Trompiz
PARIS, Feb 21 French mining and metals company
Eramet postponed its flagship nickel mine project in
Indonesia on Friday citing depressed prices which it said would
find support from the country's ban on unrefined mineral
Benchmark prices of nickel, mainly used in stainless
steel, languished at four-year lows for much of 2013 due to
global oversupply, leaving many producers operating at a loss.
Indonesia, the world's largest exporter of nickel ore, last
month went ahead with a ban on shipments of unrefined metals,
including the ore, boosting international prices on prospects
that the global surplus would be curbed.
"We hope that this ban is going to be kept firmly in place,"
chairman and chief executive Patrick Buffet said at a
presentation of Eramet's 2013 results.
"This is the factor that could bring a recovery in the
nickel market within a reasonable period."
Uncertainty over policy ahead of parliamentary and
presidential elections this year had contributed to Eramet's
decision to delay a final investment decision on the Weda Bay
mining project, Buffet said.
Eramet, which had been due to take an investment decision
this year after already putting back the deadline, booked a 224
million euro ($307 million) impairment charge for the delay.
Eramet has a majority stake in the project alongside Japan's
Mitsubishi Corp. and Indonesia's PT Antam.
In addition to low nickel prices, protracted negotiations
with the Indonesian government on tax and ownership issues had
also held up the project, Buffet said.
The postponement will involve closing an engineering support
office in Malaysia at the end of March with about 50 expatriate
staff to be redeployed while personnel in Indonesia to be
reduced to about 250 from 450, said Bertrand Madelin, head of
Eramet's nickel unit.
Eramet posted a 2013 current operating loss of 45 million
euros versus profit of 153 million a year earlier.
It said market conditions at the start of 2014 were in line
with those at the end of 2013.
The company said it would pursue 110 million euros in cost
savings, up from 85 million in 2013.
It aims to keep capital expenditure below 400 million euros
in both 2014 and 2015, down about 40 percent on the 2012-2013
Its nickel division, which posted a 222 million euro
operating loss, will aim to reduce production costs by $0.4 a
pound this year and a further $0.3 a pound in 2015, officials
"One dollar is equivalent to 90 million euros in current
operating profit for the group," Buffet said of nickel costs.
Eramet reported a net loss after impairments of 370 million
euros and said it would not pay a dividend.
The company had forecast that current operating profit in
the second half of 2013 would be "significantly lower" than in
the first half, when it reported a 9 million euro loss.
Group losses were limited by a 218 million euro operating
profit for the manganese division, against 240 million in 2012,
and a return to profit at the smaller alloys branch.
Shares in Eramet were 1.6 percent lower at 70 euros by 1353
GMT, among the top fallers on the broad French SBF 120 index
($1 = 0.7293 euros)
(Editing by Blaise Robinson and James Regan; editing by Jason