April 26, 2021 - Eramet pointed to "exceptional progress" at the plant, which only started operations in 2020, for the new target.  The 10 million wet tonnes in 2021 target is almost double the 6 million expected previously. The company also plans to produce 40,000 tonnes of low-grade nickel ferroalloys.  "[There was] exceptional progress in mining operations in Weda Bay in Indonesia [in the first quarter] with 3.0 Mwmt of nickel ore produced; a strong cash contribution is expected for the Group in 2021."  Mining operations began at Weda Bay in October 2019: the first metric ton of ferronickel was produced, and a 1.6Mth stock of nickel ore was formed.   On April 30, 2020, the first ferronickel casting took place, ahead of the initial schedule - 20 months after construction had begun on the plant.   Eramet reported on Monday that group-wide turnover up 8% in the first quarter, driven by the "strong growth" of the mining and metals division.  Other operating highlights included 1.5 Mt in manganese ore produced in Gabon, a rise of 17% versus the first quarter last year, 1.1 Mwmt of ore produced in New Caledonia, a rise of 14%.  "The strong growth momentum in our mining activities produced the expected results: in the first quarter, our operating performance continued to make progress, in a favourable price environment. Our turnover grew significantly versus the same period for 2020, which was still hardly affected by the pandemic,"  said Christel Bories, Eramet group chair and CEO.

May 2020 - Weda Bay Nickel, the Indonesia-based joint venture between French multi-metal miner Eramet, Chinese stainless steel giant Tsingshan and regional miner PT Antam went into the early stages of production on Thursday April 30, Eramet announced on the same day.

Weda Bay, located on the country’s Halmahera Island, will supply nickel to local ferro-alloys plants for stainless steel production and has an estimated annual production capacity of 30,000 tonnes of nickel contained in nickel pig iron (NPI).  Development of Weda Bay was initially suspended in 2014 amid a lower London Metal Exchange three-month nickel price and uncertainty surrounding local tax and ownership regulations, Fastmarkets understands.  This was the same year that the Indonesian government announced on January 11 that it would ban the export of unprocessed ore, including that of nickel, for the first time.  The LME three-month nickel price was at a year low of $13,425 per tonne two days before the 2014 ban was announced on January 9, before rocketing by 57% to $21,100 per tonne on May 13 following supply concerns in the wake of the announcement.  The Indonesian government announced in August 2019 that it would expedite its latest ore ban to January 2020 from 2022, causing nickel’s outright price on the LME to rocket by 8% to an intraday high of $17,900 per tonne at midday on the same day, its highest level since September 2014.
But despite a current LME three-month nickel price trading around $11,870 per tonne on May 1, Weda Bay has this time gone into production despite the current ore ban and a comparatively low outright nickel price, Fastmarkets understands.  Indeed, the announcement comes just one day after Indonesia’s Coordinating Ministry for Maritime Affairs and Investment rejected a proposal from Indonesian nickel miners to recommence nickel ore exports.  But given that Weda Bay’s NPI will be processed domestically, it complies with Indonesia's 2009 Mining Law, which stipulates that ore mined at domestic plants must be locally processed.

Weda Bay’s start up is one of four new Indonesian operations to start in 2020 - with a combined production capacity of 200,923 tonnes per year - and comes amid a challenging demand backdrop for nickel.  Automotive and stainless steel, the largest end-user market, for nickel contracted by 12.1% year on year to 10.9 million tonnes in the first quarter of 2020, Eramet reported in its first-quarter results.  Fastmarkets' research analysts current estimate electric vehicle (EV) demand for nickel is currently between 3-5% of the market share, while stainless steel demand accounts for approximately 70% thereof.  Over 50% of stainless-steel demand for nickel comes from China - the world’s largest stainless-steel producer - but demand there was severely dented amid the spread of Covid-19, which was first identified in the region on December 31, 2019.  Chinese nickel demand was down 6% over the period and 18.8% elsewhere in the world, over the first-quarter 2020, 9.8% of which came specifically from Indonesia, while global demand for primary nickel has declined by 13.5% to 508,000 tonnes over the period, Eramet's first-quarter results showed.  Meanwhile, global primary nickel production increased to 569,000 tonnes year on year in the first quarter of 2020 due to continued growth in NPI production, which was up 15.2% over the same period, according to data from Eramet's first-quarter results. These growth figures appear to be primarily driven by Indonesia amid its ore export ban, which came into effect on January this year, the report said.  But it seems that Indonesian authorities are sensitive to waning demand, with the country announcing plans to reduce its nickel ore production by 52% year on year to 25 million wet metric tonnes (wmt) in 2020, Fastmarkets understands.  Nonetheless, the Indonesian Mining Association expects 29 domestic smelters to be operational by 2022, with a total capacity of 69 million tpy.  Fastmarkets research forecasts that global refined nickel consumption will fall by 2% year on year in 2020 while restrictive government lockdowns - due to the Covid-19 pandemic - take their toll on total demand for nickel from the stainless steel and EV sectors.  But while bearish attitudes for nickel demand pervade in the first half of 2020, Fastmarkets analysts expect this contraction to ease significantly going into the second half of the year.  “We estimate that global nickel demand contracted by 5.3% from the previous year in 2020. Our view is that demand will contract again in the second quarter, down by 5.7% year on year. But demand is likely to reach stability in the third quarter of the year with a smaller contraction of 0.6% year on year,” Fastmarkets research analyst Andy Farida said.  “Our most conservative view suggests that global nickel demand will start a major recovery in the last trading quarter of the year, where deferred demand will push consumption to grow by 3.5%,” Farida added.