Eramet Picks Eiffage as Preferred Bidder for Power Plant

Mining group Eramet said on Thursday it had selected Eiffage as preferred bidder to develop a coal-fired power plant in New Caledonia that Eramet hopes will cut its nickel production costs.

The power plant, which will supply Eramet's nickel processing site in New Caledonia, is due to come into service by the end of 2018 and expected to cost around 570 million euros.

Eramet will make a final investment decision regarding the project in the second quarter of 2015, the company said in a statement.

Chairman and Chief Executive Patrick Buffet said in July that the group aimed to use export credits and an equity investment by the partner chosen to build the plant in order to bear the cost of the project.

Eramet has suffered losses at its nickel division in the past two years and is betting on cost efficiencies and an upturn in market prices, linked to an Indonesian export ban, in order to boost profitability.

A reduced loss at its nickel branch helped Eramet swing back to an operating profit in the first half of this year, and the group expects a higher operating profit in the second half.

(Reporting by Gus Trompiz)