France enters white gold rush as top producer aims to supply Europe with lithium

France enters white gold rush as top producer aims to supply Europe with lithium

A lithium-ion battery pictured at a Volkswagen factory in Germany. The EU is looking to increase the number of electric vehicles on its roads in the coming years.

Ronny Hartman | AFP | Getty Images

Mineral giant based in Paris Imerys plans to develop a lithium mining project which it hopes will help meet demand and secure supply for Europe’s emerging electric vehicle market.

In a statement on Monday, Imerys said its Emili project would be located at a site in central France, with the company targeting 34,000 metric tons of lithium hydroxide production each year from 2028.

According to the company, this level of production would be sufficient to “equip approximately 700,000 electric vehicles per year”.

Along with its use in cellphones, computers, tablets and a host of other gadgets synonymous with modern life, lithium – which some have dubbed “the white gold” – is crucial to the batteries that power vehicles. electrical.

The project Imerys envisions is taking shape at a time when major economies like the EU are looking to increase the number of electric vehicles on their roads.

The EU plans to stop the sale of new diesel and petrol cars and vans from 2035. The UK, which left the EU on January 31, 2020, is pursuing similar goals.

With increasing demand for lithium, the European Union – of which France is a member – is trying to bolster its own supplies and reduce its dependence on other parts of the world.

In a translation of her State of the Union address last month, European Commission President Ursula von der Leyen said that “lithium and rare earths will soon be more important than oil and gas. “.

As well as addressing security of supply, von der Leyen, who switched between multiple languages ​​during his speech, also highlighted the importance of processing.

“Today, China controls the global processing industry,” she said. “Nearly 90% … of the rare earths[s] and 60% of the lithium is processed in China. »

“We will therefore identify strategic projects throughout the supply chain, from extraction to refining, from processing to recycling,” she added. “And we will build up strategic reserves where supply is threatened.”

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Back in France, Imerys said it was finalizing what it called a “technical scoping study” to “explore different operational options and refine the geological and industrial aspects related to the extraction method. and lithium processing”.

The site chosen for the project has, since the end of the 19e century, was used to produce a type of clay called kaolin used in the ceramic industry.

Capital expenditure to build the proposed lithium project is estimated at around 1 billion euros (about $980 million), Imerys added.

“If successful, the project would contribute to the energy transition ambitions of France and the European Union,” the company said. “It would also strengthen Europe’s industrial sovereignty at a time when car and battery manufacturers are heavily dependent on imported lithium, which is a key element of the energy transition.”

In recent years, a range of factors have created pressure points in the supply of crucial materials for electric vehicles, an issue that the International Energy Agency highlighted earlier this year in its Global EV Outlook.

“The rapid increase in electric vehicle sales during the pandemic has tested the resilience of battery supply chains, and Russia’s war in Ukraine has further exacerbated the challenge,” the report noted. AIE, adding that the prices of materials like lithium, cobalt and nickel have soared.

“In May 2022, lithium prices were more than seven times higher than at the start of 2021,” he added. “The unprecedented demand for batteries and the lack of structural investment in new supply capacities are key factors.”

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In a recent interview with CNBC, the CEO of Mercedes-Benz sketched the current state of affairs, as he saw it, with regard to the raw materials needed for electric vehicles and their batteries.

“Commodity prices have been quite volatile over the past 12 to 18 months – some up and in fact some down,” Ola Kallenius said.

“But it’s true that we’re going electric, all-electric, and as more and more automakers are entering the electric space, there’s a need to increase mining capabilities and refining capabilities for lithium, nickel, and of some of these raw materials that are needed to produce electric cars.”

“We have everything we need now, but we need to look at the medium to long term and work with the mining industry here to increase capacity.”

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