French mining company Eramet announced on Thursday that it has acquired a 49.9% stake in the lithium mining project in Argentina from China’s Qing Shan Group, regaining full control of the project, which is crucial to meeting the demand for electric vehicle batteries.
The transaction, valued at $699 million, was completed using the company’s available liquid assets.
According to Reuters, Christel Bories, Chairperson and CEO of Eramet, stated in a conference call that the Eramine Sudamerica lithium project is expected to start production in the coming weeks. Despite the decrease in lithium prices, the project remains attractive. With full control back in their hands, Eramet can decide how to move forward with the second production facility in the plan.
It was reported by Agence France-Presse that a ceremony was held on July 3 for the completion of the Eramine Sudamerica lithium extraction plant in Salta province, northwestern Argentina to supply the booming electric car industry. Eramet mentioned that the investment in the plant amounted to $870 million.
According to Bloomberg, for Qing Shan Group, this transaction signifies an unusual withdrawal in their rapid diversification process within the battery sector. The group has been developing lithium assets in Africa and South America while also seeking to establish factories in Indonesia and enter the U.S. energy storage market.
Bories mentioned, “Qing Shan emerged as a financial partner,” noting their role as operators of processing plants. She highlighted, “We jointly decided that when we regained some flexibility, it was time for them to leave.”
In a statement, Qing Shan’s founder Xiang Guangda expressed support for smoothly and constructively transferring assets to Eramet. The two companies remain partners and jointly operate a nickel mine in Indonesia.
Eramet stated that the Eramine Sudamerica plant utilizes direct extraction technology with an annual production capacity of up to 24,000 metric tons of lithium carbonate equivalent. The company noted that resources extracted from the Centenario salt flat can support an annual output of over 75,000 metric tons.
As one of Eramet’s major shareholders, the French government has shown a positive response to this transaction.
French Minister of Energy and Climate, Agnès Pannier-Runacher, mentioned on Franceinfo radio, “This reinforces our sovereignty over key raw materials.”
Eramet announced a third-quarter adjusted revenue of €809 million, a 17% decrease year-on-year. The company anticipates that profits in the second half of 2024 will surpass those of the first half.