Eramet Plans $400 Million Lithium Plant With China’s Tsingshan

(Bloomberg) -- French mining group Eramet SA teamed up with China’s Tsingshan Holding Group Co. to build a $400 million lithium plant in Argentina as demand from electric-car makers soars.

A sharp tightening of the market for lithium -- a key component of rechargeable batteries -- has pushed prices in China to records. With little inventory in the system and consumption set to more than triple by 2025, buyers are snapping up all the output they can.

Eramet will start building the 24,000-ton-a-year processing plant in the second quarter of 2022 and commission it in early 2024, the Paris-based company said in a statement on Monday. Tsingshan will finance as much as $375 million of the project in exchange for a 49.9% stake.

“There will be some tension on the lithium market for a long period,” Eramet Chief Executive Officer Christel Bories said on a conference call. “This transition will require a lot of metals.” 

Bories sees demand for lithium increasing sixfold by the end of the decade, with consumption of nickel and cobalt also rising amid surging sales of electric cars and other battery-based products. The company is already in talks with French and European carmakers to supply them with lithium, she said.

Once fully ramped up in the second half of 2025, the Argentine plant will have annual earnings before interest, taxes, depreciation and amortization of $165 million, according to the CEO.

Eramet and Tsingshan already produce nickel together in Indonesia. 

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