UPDATE 2-Manganese drives 55 pct Eramet H1 net profit jump

(Adds byline, details, updates share price)

By Benjamin Mallet

PARIS, July 31 (Reuters) - French nickel and manganese group Eramet (ERMT.PA) posted a 55-percent jump in first-half net profit on Thursday as higher manganese prices offset a drop in nickel and allowed it to forecast strong growth for the year.

"If nickel and manganese prices stay at these levels, the group's current operating profit for the second half of 2008 should be above the one in the second part of 2007," Eramet said, adding this was not taking account of the contribution of Norway's Tinfos, which it is in the process of buying.

Current operating income for the full year 2008 would be "significantly higher", excluding the acquisition of Tinfos, the company said.

Shares in Eramet were down 4.36 percent at 443.84 euros by 1340 GMT but it was still around 30 percent higher since the beginning of the year.

First-half net profit rose 55 percent to 421 million euros ($657.6 million), while operating profit rose 32 percent to 769 million euros ($1.2 billion).

Revenue was up 27 percent at 2.32 billion euros ($3.62 billion), thanks to a sharp increase in Eramet Manganese's turnover.

NEW INVESTMENTS

Eramet said it plans to invest at least 5 billion euros ($7.81 billion) in industrial projects during 2009-2013, noting that these investments would involve partners.

It wants to raise production at its existing manganese plants by 7 percent next year.

It is also studying an increase of four million tonnes in manganese production capacity in Gabon by 2010 and the development of a deposit in Namibia.

Chief Executive Patrick Buffet told a news conference that the company was confident manganese prices would remain at high levels until 2011-2012 as supplies remain lower than high world demand.

"Given the state of our current projects ...and logistical constraints that exist in certain producer countries, supply of manganese ore should in our analysis only reach the level of global demand towards 2010-2011," Buffet said.

For the second half of this year, the group's outlook for manganese is "very favourable", Eramet said, citing high prices for ore and alloys, as well as strong demand linked to growth in global production of carbon steel.

Eramet Manganese posted a 350 percent jump in first-half current operating profit to 527 million euros ($823.2 million).

In contrast, Eramet Nickel reported a 52 percent fall in operating profit compared to the same period last year when prices had hit record levels.

Eramet said nickel demand in the second quarter was affected by a slowdown in stainless steel production in Asia, notably in China.

The group said it expects to deliver around 55,000 tonnes of nickel in 2008, the same level as in 2007. (Writing by Gus Trompiz, Editing by Jason Neely)