French mining company Eramet is set to make a substantial investment of nearly $2 billion (€1.9 billion) between 2024 and 2026, with a primary focus on increasing the production of nickel and lithium. The company is strategically positioning itself to meet the rising demand for metals crucial in the manufacturing of electric vehicle batteries.
In preparation for the anticipated surge in demand, Eramet has been divesting non-core and unprofitable metal-processing activities. CEO Christel Bories highlighted the company’s readiness “to take full advantage of the unique period ahead in a world that will need more and more metals.”
Eramet foresees a significant shift in nickel demand, with batteries expected to surpass stainless steel demand by 2032. Despite recent fluctuations in battery metal prices, the company, in collaboration with Chinese partner Tsingshan Holding Group Co., plans to double nickel sales at their Weda Bay mine in Indonesia over the next three years, aiming for a target of 60 million tons.
The lithium Centenario project in Argentina, undertaken with Tsingshan, is also on Eramet’s expansion agenda. While acknowledging an increase in project costs to $800 million, the partners intend to further invest $800 million to expand the project’s capacity by an additional 30,000 tons by mid-2027, pending construction permits, while at the same time they are said to be exploring the nearby Arizaro deposit.
To bolster lithium reserves, Eramet plans to spend $95 million, with an additional $10 million contingent on the project’s outcome, to acquire exploration and mining concessions in northern Chile. The company is also considering the construction of a battery-recycling plant with Suez in France and a nickel and cobalt refining facility with Germany’s BASF SE in Indonesia, with decisions expected in the near future.
Christel Bories emphasized the company’s commitment to its investment plans, noting that these strategic moves are well-positioned for growth, irrespective of global economic conditions. Despite challenges, including financial difficulties at its nickel subsidiary SLN in New Caledonia, Eramet remains resilient in its pursuit of a sustainable and prosperous future.
Beyond nickel and lithium, Eramet aims to increase manganese output in Gabon by more than 20% to 8.5 million tons by 2026. Additionally, plans are in place to enhance the production capacity of mineral sands in Senegal.
Information for this briefing was found via Bloomberg, Reuters, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
