* Decision will allow SLN to export lower-grade nickel ore
* SLN authorised to export 4 mln tonnes of ore annually for 10 yrs
* Move helps strategy to cut SLN’s cash cost by $1.30/lb by 2021
* Shares up around 5pct in early trade (Adds share price reaction and more detail)
PARIS, April 16 (Reuters) - French mining company Eramet said its loss-making SLN nickel division had received a boost from the New Caledonia government approving a sharp rise in SLN’s nickel ore exports.
Eramet shares rose around 5 percent in early trading.
The company said the decision would allow SLN to export its lower-grade nickel ore, which in turn would allow SLN to cut its costs. It added the move would help it execute a broader strategy plan to reduce SLN’s cash cost by $1.30 per lb by 2021.
“I would like to thank the government of New Caledonia and all the stakeholders who contributed to this decision,” said Eramet Chairman and CEO Christel Bories. “This is a sign of confidence in the successful implementation of the SLN rescue plan.”
The government in the French Pacific territory authorised SLN to export 4 million tonnes of nickel ore annually for 10 years, Eramet said.
SLN, which had already increased its ore exports to a record 1.2 million tonnes last year, said it would aim to reach 1.5 million tonnes in 2019 and reach an export pace equivalent to 4 million tonnes annually by mid-2020.
Eramet had requested the 4 million tonne export allowance as part of a recovery plan unveiled in February. The group says it will be able to market lower-grade mineral that it cannot use for its smelter in New Caledonia that produces ferronickel.
SLN’s production cost for nickel had risen to $5.8 a pound in 2018 from $5.1 in 2017 and Eramet said in February it was aiming to lower this cost by $1.3 by 2021.
Efforts to cut production costs at SLN had suffered a setback last year due to higher energy prices, exchange rate effects and worker protests at its New Caledonian mines. (Reporting by Sudip Kar-Gupta and Gus Trompiz Editing by Kirsten Donovan and David Holmes)
Our Standards: The Thomson Reuters Trust Principles.