French mining group Eramet SA has reported a 23% drop in its first quarter net profit to EUR 135 million due to a higher effective tax rate related to dividends, while its revenue for the period increased 8% to EUR 1.93 billion from EUR 1.79 billion.

Current operating income was up 7% compared with the 1st half of 2010, at EUR 366 million.

Mr Patrick Buffet chairman & CEO of the Eramet Group said that "The group's current operating income in the 1st half of 2011 is up compared with the 1st half of 2010, in line with what I announced on April 28th 2011. ERAMET is continuing to simultaneously implement both the programs to improve its competitiveness and its strategic project."

He added that "The JV agreement signed with our Australian partner, Mineral Deposits Limited, for the development of the Grande Cote project in Senegal allows us to create an important new player on the high potential mineral sands markets, while also broadening the scope of the group's business activities. In addition, the ramp up of the key major projects is continuing satisfactorily. Lastly, Erasteel has consolidated its position by signing a partnership agreement with HeYe, a leading Chinese player in the high speed steel business."

The outlook for the mining divisions looks less favorable overall at the beginning of the 2nd half of 2011 compared with the 1st half of 2011, due in particular to the fall in manganese ore and alloy prices which has taken place in recent months.

In the medium and long terms, the fundamentals of Eramet's businesses will remain strong, driven by the growth of markets in emerging countries, particularly China.

(Sourced from www.dowjones.com)