REFERENCE DOCUMENT ERAMET REFERENCE DOCUMENT 2006 2006 Tour Maine-Montparnasse 33, avenue du Maine F-75755 Paris Cedex 15 Tel.: (33) 01 45 38 42 42 Fax: (33) 01 45 38 41 28 www.eramet.fr A Société Anonyme (public limited company) with a share capital of €78,936,726.70 Registered office: Tour Maine Montparnasse, 33 Avenue du Maine, 75015 Paris, France Paris trade register number 632 045 381 2006 REFERENCE DOCUMENT Drawn up in accordance with Articles 211-1 to 211-42 of the general regulations of the AMF [Autorité des Marchés Financiers - French securities regulator] This document, drawn up on the basis of the 2006 financial statements, includes material information subsequent to the approval of those financial statements as on the date of its filing. Filed with the AMF. This Reference Document was filed with the AMF on July 20, 2007, pursuant to Article 212-13 of its General Regulations. It may not be used in support of a financial transaction unless it is accompanied by a prospectus approved by the AMF. Design and production: REFERENCE DOCUMENT 2006 TABLE OF CONTENTS The structure of this Reference Document is in line with Appendix I of European Regulation (EC) no. 809/2004. 1. PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT 9 1.1. NAME AND POSITION OF PERSON RESPONSIBLE 9 1.2. DECLARATION BY THE PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT 9 2. STATUTORY AUDITING - NAME OF AUDITORS 9 2.1. STATUTORY AUDITORS 9 2.2. ALTERNATE AUDITORS 9 3. SELECTED FINANCIAL INFORMATION – KEY BUSINESS FIGURES 10 3.1. SELECTED HISTORICAL INFORMATION 10 3.2. KEY BUSINESS FIGURES 10 3.3. INFORMATION ON THE COMPANY’S STOCK 11 3.3.1. LISTING MARKET 11 3.3.2. SHARE PRICE TRENDS 11 3.3.3. SECURITY SERVICES 13 4. RISK FACTORS 14 4.1. MARKET RISKS 14 4.1.1. FOREIGN CURRENCY RISK 14 4.1.2. INTEREST RATE RISK 16 4.1.3. LIQUIDITY RISK 17 4.1.4. COVENANTS 17 4.1.5. COUNTERPARTY RISK 17 4.1.6. MAIN OFF-BALANCE SHEET COMMITMENTS 17 4.1.7. STOCK RISKS 18 4.2. LEGAL RISKS AND LAWSUITS 18 4.2.1. DEPENDENCY ON THE LEGISLATIVE AND REGULATORY ENVIRONMENT 18 4.2.2. RISKS STEMMING FROM CONTRACTUAL COMMITMENTS TO THIRD PARTIES 18 4.2.3. MAJOR LAWSUITS 19 4.2.3.1. NICKEL DIVISION 19 4.2.3.2. MANGANESE DIVISION 20 4.3. INDUSTRIAL RISKS 20 4.3.1. INDUSTRIAL ACTIVITY AND SUSTAINABLE DEVELOPMENT 20 4.3.2. A STRONGER GROUP ENVIRONMENTAL POLICY 20 4.3.2.1. IMPROVEMENT OF AIR QUALITY 20 4.3.2.2. MANAGEMENT OF HISTORICAL SITE POLLUTION AND SITE RESTORATION 21 4.3.2.3. IMPLEMENTATION OF NEW MANAGEMENT AND COMMUNICATION MEASURES 21 4.3.2.4. TOWARDS ISO 14000 CERTIFICATION OF INDUSTRIAL SITES 21 4.3.3. MANAGEMENT OF THE CLOSURE OF THE BOULOGNE-SUR-MER SITE (COMILOG FRANCE) 21 4.3.4. SPECIAL FOCUS ON HAZARDOUS SUBSTANCE MONITORING 21 4.3.5. CONTRIBUTION TO GREENHOUSE GAS REDUCTION POLICY 22 4.3.6. PUTTING IN PLACE AN INDUSTRIAL RISK PREVENTION POLICY 22 4.4. INSURANCE/ COVERAGE OF RISKS LIKELY TO BE INCURRED BY THE ISSUER 23 4.4.1. THE GROUP’S GENERAL COVERAGE POLICY / RISK COVERAGE STRATEGY 23 2006 REFERENCE DOCUMENT 4.4.2. DIFFERENT TYPES OF INSURANCE TAKEN OUT 23 4.5. OTHER SPECIFIC RISKS 24 4.5.1. TRANSPORTATION-RELATED RISKS 24 4.5.2. ENERGY-RELATED RISKS 24 4.5.3. POLITICAL RISKS 24 4.5.4. ASBESTOS RISK 25 4.6. THIRD PARTY RELATIONSHIPS 25 5. INFORMATION ON THE ISSUER 25 5.1. INFORMATION ON THE COMPANY 25 5.1.1. COMPANY NAME (ARTICLE 2 OF THE ARTICLES OF ASSOCIATION) 25 5.1.2. COMPANY REGISTRATION NUMBER 25 5.1.2.1. TRADE REGISTER /SIRET NUMBER 25 5.1.2.2. NAF CODE AND BUSINESS SECTOR 26 5.1.3. DATE OF INCORPORATION AND TERM OF THE COMPANY (ARTICLE 5 OF THE ARTICLES OF ASSOCIATION) 26 5.1.4. REGISTERED OFFICE (ARTICLE 4 OF THE ARTICLES OF ASSOCIATION) 26 5.1.5. HISTORY AND DEVELOPMENT OF THE COMPANY 26 5.2. CAPITAL EXPENDITURE 27 5.2.1. GOALS 27 5.2.2. MAIN CAPITAL EXPENDITURE PROGRAMMES 27 5.2.2.1. TOTAL AMOUNT OF CAPITAL EXPENDITURE 27 5.2.2.2. BREAKDOWN OF CAPITAL EXPENDITURE BY DIVISION AND DESCRIPTION OF MAJOR PROJECTS 28 6. PRESENTATION OF BUSINESS ACTIVITIES 30 6.1. NICKEL DIVISION 30 6.1.1. NICKEL MARKET 30 6.1.1.1. NICKEL DEMAND 30 6.1.1.2. NICKEL SUPPLY 31 6.1.1.3. NICKEL PRODUCERS 33 6.1.1.4. NICKEL PRICES 33 6.1.1.5. STATE OF THE NICKEL MARKET 34 6.1.2. PRESENTATION OF ERAMET’S NICKEL DIVISION 34 6.1.2.1. NICKEL DIVISION KEY POINTS 34 6.1.2.2. NICKEL DIVISION STRUCTURE 35 6.1.2.3. THE NICKEL DIVISION IN 2006 39 6.2. THE MANGANESE DIVISION 41 6.2.1. THE MANGANESE MARKET 41 6.2.1.1. MANGANESE DEMAND 41 6.2.1.2. MANGANESE SUPPLY 42 6.2.1.3. MANGANESE PRICES 42 6.2.1.4. RECENT MARKET CONDITIONS 43 6.2.2. PRESENTATION OF ERAMET’S MANGANESE DIVISION 44 6.2.2.1. MANGANESE DIVISION KEY POINTS 44 0302- REFERENCE DOCUMENT 6.2.2.2. MANGANESE DIVISION HISTORY 44 6.2.2.3. MANGANESE DIVISION STRUCTURE 45 6.2.2.4. THE MANGANESE DIVISION IN 2006 48 6.3. ALLOYS DIVISION 48 6.3.1. ALLOYS DIVISION BUSINESSES 48 6.3.2. ALLOYS DIVISION MARKETS 49 6.3.2.1. HIGH-SPEED STEELS 49 6.3.2.2. TOOL STEELS 49 6.3.2.3. NICKEL BASED ALLOYS 49 6.3.3. ALLOY PRODUCTION PROCESSES 50 6.3.3.1. ALLOY MAKING 50 6.3.3.2. ALLOY SHAPING 51 6.3.4. ALLOY PRODUCERS 51 6.3.5. ALLOYS DIVISION STRUCTURE 52 6.3.5.1. ALLOYS DIVISION KEY POINTS 52 6.3.5.2. ALLOYS DIVISION HISTORY 52 6.3.5.3. ALLOYS DIVISION ORGANISATIONAL STRUCTURE 53 6.3.5.4. ALLOYS DIVISION PRODUCTION 53 6.3.5.5. MARKETING POLICY AND PRODUCTS 56 6.3.5.6. ALLOYS DIVISION RESEARCH AND DEVELOPMENT 56 6.3.5.7. THE ALLOYS DIVISION IN 2006 56 6.4. ORGANISATION OF ERAMET SA/ERAMET HOLDING 57 7. ORGANISATIONAL CHART 58 7.1. CONTROL CHART 58 7.2. GROUP ORGANISATIONAL CHART AS ON DECEMBER 31, 2006 58 8. THE GROUP’S PROPERTY, PLANT & EQUIPMENT 59 9. REVIEW OF FINANCIAL POSITION AND NET INCOME 60 9.1. KEY BUSINESS FIGURES 60 9.1.1. BUSINESS ITEMS (CONSOLIDATED DATA IN MILLIONS OF EUROS) 60 9.1.2. CONSOLIDATED FINANCIAL STATEMENTS 60 10. CASH POSITION AND SHARE CAPITAL – MARKET RISK 61 10.1. INFORMATION ON THE GROUP’S SHAREHOLDERS’ EQUITY 61 10.1.1. OPERATING WORKING CAPITAL 61 10.1.2. CONSOLIDATED NET CASH POSITION 61 10.1.3. PROVISIONS 62 10.1.4. OTHER NON-CURRENT LIABILITIES 62 10.1.5. SHAREHOLDERS’ EQUITY 62 10.2. FINANCING AND CREDIT FACILITIES 62 10.2.1. RENEWABLE CREDIT FACILITIES 62 10.2.2. COMMERCIAL PAPER 62 11. RESEARCH AND DEVELOPMENT 63 11.1. DEDICATED ORGANISATION SERVING THE DIVISIONS 63 2006 REFERENCE DOCUMENT 11.2. EXPLOITATION OF DEPOSITS / MINERAL RESERVES AND RESOURCES 64 11.2.1. GENERAL REMARKS 64 11.2.1.1. LOCATION 64 11.2.1.2. LEGAL CLAIMS 64 11.2.1.3. ESTIMATES 64 11.2.1.4. DEFINITIONS 65 11.2.2. COMILOG S.A. RESERVES AND RESOURCES 65 11.2.2.1. MINERAL RESOURCES 65 11.2.2.2. RECOVERABLE MINERAL RESOURCES AND RESERVES 66 11.2.3. LE NICKEL-SLN’S RESERVES AND RESOURCES 67 11.2.3.1. SAPROLITE MINERAL RESOURCES FOR PYROMETALLURGY 67 11.2.3.2. RECOVERABLE MINERAL RESOURCES AND RESERVES FOR PYROMETALLURGY 68 11.2.3.3. OTHERS HYDROMETALLURGY RESOURCES 68 11.2.4. RESOURCES OF PT WEDA BAY NICKEL 68 11.2.4.1. OVERALL MINERAL RESOURCES 68 11.2.4.2. BREAKDOWN OF MINERAL RESOURCES 69 12. INFORMATION ON TRENDS 70 12.1. RECENT TRENDS AND OUTLOOK 70 12.1.1. DEVELOPMENTS UP TO THE DATE OF THE BOARD MEETING 70 12.1.2. FIRST QUARTER 2007 SALES (UNAUDITED) 70 12.1.3. OUTLOOK FOR 2007 71 13. EARNINGS ESTIMATES AND FORECASTS 71 14. CORPORATE GOVERNANCE 71 14.1. COMPANY AND GROUP MANAGEMENT AND SUPERVISORY BODIES 71 14.1.1. GENERAL MANAGEMENT 71 14.1.1.1. COMPANY MANAGEMENT METHOD (ARTICLE 15 OF THE ARTICLES OF ASSOCIATION) 71 14.1.1.2. COMPOSITION 71 14.1.1.3. ORGANISATIONAL CHART AS ON MAY 23, 2007 72 14.1.2. BOARD OF DIRECTORS 73 14.1.2.1. APPOINTMENT RULES 73 14.1.2.2. COMPOSITION 73 14.2. PERSONAL SITUATION OF EXECUTIVES 74 15. TOTAL REMUNERATION AND BENEFITS OF CORPORATE OFFICERS AND EXECUTIVE COMMITTEE 79 16. OPERATION OF MANAGEMENT AND SUPERVISORY BODIES 81 16.1. MODE OF OPERATION 81 16.2. BYLAWS OF THE BOARD OF DIRECTORS 82 17. EMPLOYEES 83 17.1. HUMAN RESOURCES 83 17.2. IMPROVING HUMAN RESOURCE MANAGEMENT 83 17.3. WORKFORCE 84 17.4. WORK ORGANISATION AND REMUNERATION 87 17.5. INDUSTRIAL RELATIONS 88 0504- REFERENCE DOCUMENT 17.6. TRAINING 88 17.7. HEALTH AND SAFETY 89 17.7.1. SAFETY 89 17.7.2. SAFETY AUDITS 89 17.7.3. SAFETY CLUB MEETINGS 90 17.7.4. HEALTH 90 17.7.5. ERAMET GROUP CHARTER 91 17.8. INTERESTS HELD BY CORPORATE OFFICERS 91 17.8.1. INDIRECT INTERESTS 91 17.8.2.