French mining group Eramet reports financial fraud

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PARIS, Dec 21 (Reuters) - Eramet (ERMT.PA) has identified a potential 45 million euro ($50.8 million) financial fraud within its group treasury operations, the French mining company said on Tuesday.

"Eramet will file a criminal complaint with the authorities and has taken immediate disciplinary measures against the identified staff. The group will also take all possible measures to reduce the impact of this fraud on its accounts," it said in a statement.

The estimated impact, which is before insurance or legal action, will be accounted for in 2021 operating profit, Eramet said.

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The company was looking at how it could strengthen internal control procedures and its board of directors is monitoring the situation, it added.

A spokeswoman declined to comment further.

Eramet shares were down 0.1% by 0840 GMT, underperfoming a positive early trend in Paris stocks, though they trimmed an initial drop of about 1%.

The financial impact of the fraud seemed manageable at less than 5% of the group's 2021 target for core earnings, said an analyst who spoke on condition of anonymity.

In October, Eramet had raised its core earnings target to close to 1 billion euros after favourable metal prices and strong mining output boosted third-quarter results. read more

Eramet's activities are concentrated in mining and processing nickel and manganese. Under Chairwoman and Chief Executive Christel Bories, it has shifted its focus from supplying the steel industry to developing raw materials for electric vehicle batteries.

The CEO has also restructured Eramet's downstream metallurgical activities, including aerospace supplier Aubert & Duval, which it plans to sell.

($1 = 0.8860 euros)

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Reporting by Sudip Kar-Gupta, Gus Trompiz and Piotr Lipinski Editing by David Goodman

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