Christel Bories (PDG d'Eramet) : "La transition énergétique est forcément inflationniste !"

I think that first of all, the energy strategy is not played out at the level of France today. At the European level, we have more and more of a European ecosystem, whether in energy, everything is interconnected. So I think the energy strategy is played out primarily at the European level. Agreeing within Europe, I agree, but we have no choice, we must build it at the European level. And I would even say when we talk about CO2, since we do all this also to lower CO2 levels, we need an increasingly global strategy because CO2 has no borders. So we need to bring everyone around the table. So I think it is first a European strategy. I think Europe from this point of view has a fairly good vision and fairly good standards. What is missing, and the domain I know better, is effectively the entire value chain that Europe has not at all taken into account in its energy strategy. That is all the metals. Yes, our raw materials and especially metals, because fewer fossil fuels means more metals. Whether it is for building wind turbines, solar panels, batteries especially for electric vehicles, it is extremely demanding in metals. Copper to transport electricity everywhere. So it is much more metals. Let me give some figures: when you take the example of an electric vehicle battery, a battery accounts for 30 to 40% of the value of the electric vehicle, it is 350 kg, and it is only metals. And notably there is 50 kg of nickel, 50 kg of lithium. And I mention this because it is what Eramet produces. Everyone knows Eramet on Boursorama, but for those who don't know, it is a mining group present in all metals, almost all, I believe, for the energy transition. At least many, yes. Manganese, nickel, cobalt, lithium, all that. 3.5 billion turnover. We think the potential is immense given this energy transition, which is not just French but global. And moreover, the mines are not in France but elsewhere in the world. So it is indeed global stakes. So to come back to my example, if we want to have by 2030 about 50% electric vehicles, we need to increase, for example, global nickel production by 50%. That is 1 million tons to extract and transform. Just for the first transformation step of nickel, a plant is 50,000 tons, that's 2 billion in investments. So just for 1 million tons by 2030, that's 20 plants, 40 billion. And all this is outside France because nickel is not in France, not in Europe either. It is in Indonesia and South America notably. And the IEA reminds us in its latest report, which I invite you to consult, that this decarbonization of the global economy will be accompanied by an explosion of this demand. Lithium needs multiplied by 42 by 2040, graphite by 25, cobalt by 21.

In fact, I think that for lithium, yes, there is a lot on the planet. The problem is the competitiveness of the deposits and then being able to exploit them sustainably. Because to reduce carbon, we must avoid impacting water resources, deforestation. That is the whole paradox: to extract these metals of the energy transition to have a decarbonized economy, initially there are activities that are polluting. That is the paradox of green energies, which are made from metals, extraction. But it is not necessarily polluting if we do it responsibly. That is the whole challenge. We, for example, have standards to not impact water resources, or very weakly, to be net positive in biodiversity, meaning we add more biodiversity than we destroy. So there are very responsible ways to do mining and also transformation. Simply, not everyone does it like that today in the world. So we must ensure that this mining is done responsibly. With this exploding demand, the question comes back: will there be enough metals? There will be enough ores, given the needs. But these figures are good. What geological studies show is that a priori yes, there will be enough. Simply, they will be more expensive because the highest-grade resources are already being exploited. We will go increasingly to lower grades, more complicated places. So there is a structurally inflationary effect. And in addition, if you want to do it sustainably, treating waste properly, it is even more so. So effectively, metal prices will be a bit higher. Is that socially acceptable? Because behind it is the consumer who pays for their energy. But the consumer at some point must make choices, and as a citizen and a community, they will have to accept paying a bit more to have both less carbon and responsible alternatives. Today, technologies also allow us, and we have seen with the progress of solar energy, to have access to renewable energies that are increasingly cheaper. So there will be energy efficiency. So in the end, it is not certain that the consumer pays much more if they consume more efficiently, if interconnections exist. But at the beginning, there will be a bit of inflation.

As much as it is enough, in quotes, to have money to build gigafactories in Europe, the technology exists, if we put the means, we will have them for batteries but also for our wind turbines, etc. The mines are there, geology means that nature placed them where they are. I take the example of nickel: 100% of today's global resources of a certain type are in Indonesia. And Indonesia decided two years ago to ban exports of nickel ore to keep it at home to attract investors to add value. So they started with ferronickel, now they make nickel sulfate for batteries. And the question some ask me is whether they will make batteries tomorrow, saying my nickel will serve for batteries. They will surely be present across the entire planet. So it is risky. And so we have a geopolitical issue: to forge alliances. Today, the IEA, the financial players, because we risk moving from a dependence on oil and therefore on Gulf countries to another form of dependence, again dependence on metals, dependence on democracy and the Republic of Congo, etc. But there is a real subject. I mean, it is a change in our diplomacy, in the management of geopolitical relations. There are two things to do. First, there is economic diplomacy and real geopolitics to do at the level. But we are not experts. The message of the IEA is to say, okay, there are considerable metal needs, but behind it, we must prepare to not fall into this new dependence, even to constitute stocks, strategic metal reserves, like some countries do. While some others, unlike us, are perhaps better prepared. I think of China, perhaps Switzerland, they prepare. But in terms of supply management, stocks. Today, China, which does not have the metals we talked about earlier, panics. It has grabbed lithium. Today it holds 50% of the world's mines for these metals and two-thirds of the capacities. So they have taken several lengths ahead of us. Because they anticipate a lot. They saw things coming for several years and anticipated the default of Europe that we talk about. We did not anticipate this thing. We did not anticipate the value chain. Now there is a awareness that has been clear, and honestly, the crisis was a very good revealer from this point of view. Because suddenly we realized we could miss essential materials for our economy or for our population in terms of health, etc. And we suddenly became aware of sovereignty issues. Europe created the ERMA, the alliance for raw materials, which was something I think unimaginable a few years ago. Now there is an alliance for raw materials. It is in its infancy, we are at the beginning. It was created a few months ago. Now we need to give it financial means. But it shows that there is a real awareness that we must give ourselves the means to secure our raw materials.

So in Argentina, we have a very large lithium deposit in the north of Argentina, which we had started to develop with the beginning of construction of a plant to treat the brine. It was put on hold in 2020 due to COVID and all the problems. And with 500 million euros of investments, we are now thinking about restarting this project. It is a fairly key project since the market is restarting, so we are looking to restart this project. And in Indonesia, we are in partnership on the mine. The mine has already started, it started very, very well, and it is becoming one of the largest nickel mines in the world. On this mine, we are in partnership with a Chinese company, we have 43% of the deposit, and we are in association with BASF to build on this mine a plant that would produce nickel and cobalt sulfate for batteries. Since the mine has the unique advantage of being in the capital, it is a strategic asset. For France, you are a part of the solution to this energy transition, again at the global level.

So there are all the big players in the industry. It is by industry actually. There are specialists in the lithium industry, so in lithium you can find the Chileans, companies like SQM, like Albemarle, which are in Chile, Peru. So we find the giants. Then there are competitors by method or by company. In nickel, we also find some big players like Vale, for example, which we find in other base metals. But there is still a distribution of the mining world between miners who do the big base metals like copper, aluminum, and those who do intermediate more specialized metals like nickel, lithium, or manganese. There you find people who are more specialists, names that may not mean much to you, but it is all specific. For example, manganese, rare earths, if we can also talk about them, are rare by name, but I think 80% is produced in China.

So that is the famous taboo subject. The French state has just issued a new mining code, the bases of which have been laid, which will be published by decree in the coming weeks. I think we will take a lot of time culturally to reopen mines in France. Overall, it is complicated in Europe too, even if Northern Europe, notably Sweden, which is a country very attentive to the environment, has shown that we can operate mines in a completely environmentally respectful way. Is it a cultural revolution? I think it will take time before we reopen mines in France. It will not be my mines. But of course, it has nothing to do with the past, but the image remains. There is a lot of cultural opposition from local communities, from our fellow citizens in France to opening mines. Mining retains an image, as you said earlier. The first reflex is to say it is a polluting activity. A mine operated responsibly is not polluting, and we rehabilitate. It is less polluting, it is not a CO2 emitter. There is very little energy in a mine. So if you treat water well, treat biodiversity well, rehabilitate everything you have mined as you go, you have an extremely low environmental impact. But we still need to demonstrate that to our fellow citizens.