* Eramet sees H1 operating income close to H2 2013
* Q1 sales down 10 pct, manganese maintenance weighs
* Q2 sales seen up vs Q1 as nickel prices recover
(Writes through with quotes, detail)
PARIS, April 29 French mining and metals group
Eramet said on Tuesday it expected to make another
operating loss in the first half of 2014 despite a recovery in
nickel prices driven by an Indonesian ban on unprocessed mineral
The group, whose nickel operations are based in the French
Pacific territory of New Caledonia, has been pinning its hopes
on Indonesia's export embargo to curb global oversupply and
bolster prices that sank to a four-year low in 2013.
Nickel prices had recovered significantly since March but
still remained down 15 percent on year at "an abnormally low
average level" of $6.64 a pound, it said.
"Eramet group turnover should pick up in Q2 2014, compared
with Q1 2014," it said in a first-quarter sales statement.
"Nonetheless, in view of the relative movement in nickel and
manganese prices, current operating income for first-half 2014
should be approximately the same as in second-half
2013," it said.
Eramet posted a current operating loss of 45 million euros
for 2013, including losses in each half. Its nickel branch
suffered a full-year loss of 222 million euros and the poor
market conditions led Eramet to postpone its flagship nickel
mining project in Indonesia.
Benchmark nickel prices in London reached their
highest in almost 15 months on Monday as the metal used in
stainless steel after a rally sparked by Indonesia's export ban
Eramet's shares have mirrored nickel prices this year,
rising to a 14-month high last week.
The group's first-quarter sales fell 10 percent compared
with the year-earlier period to 714 million euros.
Its nickel branch saw sales fall 8 percent to 166 million
euros, as a 5 percent increase in output at its Doniambo plant
in New Caledonia was offset by still weak market prices.
Sales at the manganese division were down 16 percent on the
year at 326 million euros, hit by shutdowns for maintenance in
Gabon and Norway as well as a 7 percent drop in manganese ore
spot prices in China linked to destocking, Eramet said.
Eramet said measures introduced to improve productivity and
trim costs at all levels of the group will continue during 2014.
The group announced in February plans to cut costs by 110
million euros this year, after 85 million in savings in 2013,
and also reduce investments by about 40 percent from average
levels in 2012-2013.
(Reporting by Andrew Callus and Gus Trompiz; Editing by James