Reuters reported that French nickel and manganese group Eramet has decided to slash planned spending for this year by over half as it sees market conditions remaining very difficult in the early part of 2009.

Eramet said that it is now targeting capital expenditure this year of EUR 336 million, down by 54% from its initial objective of EUR 736 million. It added that "This figure could be revised downward in 2009 depending on how the crisis evolves."

Eramet reiterated targets to reduce nickel and manganese output in the coming months, adding it will continue to adjust manganese output to demand throughout the year. It said that "In the short term, the ongoing economic downturn and substantial inventory reductions continue to weigh on our markets."

For nickel, it plans to cut annual production to 50,000 tonnes in 2009, down from 51,000 in 2008 which was already 14% lower than in 2007. In manganese, Eramet will in the first quarter reduce ore production to 40% of capacity and alloy output to 35% of capacity. The group's alloys division, meanwhile, has been affected by difficulties in the aeronautics sector and it is preparing adjustment measures.

(Sourced from www.reuters.com)