Christel Bories (Présidente d'Eramet) : "Je suis persuadée que notre cours de Bourse va rebond...

So, the market environment is indeed not easy. We are at the bottom of the cycle for metals. Uh, demand, you see what the state of the global economy is. So demand is quite slack, and notably China, which is the big driver of raw material consumption in the world. China has slowed down a lot on infrastructure, on real estate essentially. And so that's less consumption. For all metals today, the price of all metals is affected. All metals are at their lowest currently. Copper has risen. Copper is not that high. It has risen a little. Yeah. Finally, for copper, we could imagine copper is probably the metal that is most under tension for the energy transition in the future. So, we were saying that copper was going to explode because we would run out of copper. The reality is that at $10,000 per ton, there aren't necessarily a huge number of new deposits that will be profitable. So all strategic metals, all critical metals today are at the bottom of the cycle with prices that are, I realize, at the lowest in I don't know 2 or 3 years. So actually, we cannot reason in the abstract because when we had for example at the time of Covid, we could have prices that were potentially lower at that time, we also had oil, you just mentioned oil, we had oil at $20 or $30 per barrel. Today, we are at $75. So in fact, we must look at all the factors, which are the input factors, I would say, in the cost economics for raw materials. And when we look at that, we are at a level that is below the Covid level. So we are at a very low level. And in this context, once again and it is also your work, Eramet resists better while the metals market is at the bottom of the cycle. A few years ago, I think profits were close to zero or zero plus. So effectively, we did a small calculation: what would have been the profits of Eramet, I would say portfolio and existing performance in 2024 if we had stayed with the same portfolio and the same performance as in 2018, and in 2024 we would have had an EBITDA of 140 million euros, whereas we have 814. So we see that the difference has been major. There have been almost 700 million euros of creation, I would say, of intrinsic value linked to the transformation of the group during all these years. Both a strategic repositioning, managerial, operational, I would say, with an increase in performance. And then obviously also a societal repositioning which is very important in our businesses.

Absolutely. So both, I would say it's a triple transformation. There is indeed a big strategic transformation in terms of portfolio. Refocusing on mines, which were the real wealth of the group. All of Eramet's mines are in the first quartile of the cost curve. There are not many miners who can boast that. They all have strong growth potential because in fact they were quite under-exploited. Over the period, we opened two huge new deposits. One in Indonesia for nickel, which is the largest nickel mine in the world. One in Argentina for lithium, which is one of the largest deposits in the world. And these mines, these deposits are still in full growth. And then we also did for our manganese mine in Gabon, we doubled its size. So it became the largest manganese deposit in the world. 15% of global production. So in Indonesia, nickel also makes 15% of global nickel production. So these are very large players and Eramet had this in its portfolio, it had to be developed, given its full potential, and that's what I did. And at the same time, we disinvested from metal transformation, so activities that were moreover a lot in France, at Berdu Val, Sandouville, which were divested, so a fairly major change in portfolio.

So it doesn't take us out of the game, we are extractors, and we have a very strong position in Gabon and very strong in the world of manganese. Transforming all of Gabon's manganese production locally. It's a small country, 2 million inhabitants. So that requires a massive, huge increase in energy and transport infrastructure. It would mean putting twice the transformation capacity of Europe in Gabon. Ah yes. So we have to look with the authorities. Of course we will cooperate. We have always done so to try to do as much as possible in Gabon with our Gabonese partner, but it's true that the challenges, which led some analysts to say it was unrealistic, and indeed there are big feasibility issues to achieve it in the allotted time.

Well, the transformation must be profitable. We do manganese transformation. We do it in Norway. We have three plants in Norway. We have one in the United States. We have a small one in northern France. You need a lot of cheap and green energy. That's what we have with hydroelectricity in Norway, that's what we have with nuclear in France. We also have a plant in Gabon with hydroelectricity. So you need abundant, cheap, green energy. You have to achieve that. So those are the standards we set. Exactly. So if we manage to have that, it may be that local transformation can be profitable. And if we don't succeed, I think Gabon itself has no interest in shooting itself in the foot. Today, it generates a lot of value from exporting ore. We pay a lot of taxes, a lot of dividends. The Gabonese state is itself a shareholder at nearly 30% of our subsidiary. So it derives a lot of value today from this export. So it will have to do its calculations, to see what is most profitable for the country, to continue exporting or to transform more, and we will help it make these trade-offs.

So, this is a great source of satisfaction. First, it's an industrial first. So, yes, exactly. So we have a process, for the common mortal, we have a process called direct extraction. The lithium we extract serves for electric batteries especially. So we talk about lithium-ion batteries. Moreover, whether it's so-called LFP (lithium iron phosphate) batteries, which are today the batteries growing in China, or the so-called NMC (nickel manganese cobalt) batteries, they all have lithium and they all have a significant amount of lithium. So lithium is necessary for energy storage. And this lithium in Argentina is extracted from brine found in the salars. So we pump this brine. And the traditional method, which is widely used in Chile and also in Argentina, is a direct evaporation method. So it's the salt pan method. You pump, you put it in large basins, you evaporate the water, and then you treat the remaining salt, which contains lithium. The problem with this process is that it is extremely consuming of water resources because you evaporate all that water. And it has a fairly low yield, between 50 and 60% yield. That means you only manage to recover 50 to 60% of what you extracted in lithium. Our direct extraction process is a process that extracts the brine, passes it through granules, through columns. So it's a hydrometallurgical process that absorbs the lithium from the brine. And the brine, devoid of its lithium, is put back into the salar. And after the lithium, there is a whole refining process that takes place in a plant on site. We directly produce, at 4000m altitude, battery-grade lithium carbonate that is sold to battery manufacturers. So this process is the first time in the Western world. It is the first time in Chile or Argentina that this process has been used on an industrial scale and it works. We are happy to show that the process works. We are ramping up the plant to full capacity. We hope to be at full capacity during the second half of this year. The plants are quite complex, but today the process works and it is both economical with the lithium resource and the water resource. So more environmentally responsible, I would say, with much less land footprint compared to the large land footprint of evaporation, and therefore socially and environmentally more responsible.

In Alsace, we also have brines, but much deeper. So in Chile or Argentina, they are about 300m deep. So relatively easy to access. In Alsace, it's rather at 2km, let's say. And today, we extract these brines for their heat, because they are very deep, so they are hot, and today we extract them for geothermal energy. That's what our partner Électricité de Strasbourg does today. They extract these brines for heat. And so the idea is to say: these brines also contain lithium, in much smaller quantities than what we find in Argentina or Chile, but since they are already extracted for their heat, the idea is once we have extracted the heat, to extract the lithium before reinjecting the brine into the ground. So the process that we have developed, on which we have patents, which works in Argentina, also works on Alsatian brines. Now we are in a development phase, I would say, of the economic model. We need to find a model to have lithium. So we need to see at what speed; we are not there yet. We are more towards the end of the decade, I would say 2029. With what potential? We are not heading towards strategic autonomy with... Oh no, we will... France perhaps, Europe. Well, we have the capacity to do it, depending on the number of wells that we will be allowed to drill in Alsace. But there is potentially the potential in Alsace to serve the entire French vehicle market if all vehicles became electric. So we could have autonomy for France. What needs to be demonstrated is the economic model now, because it requires much higher capital intensity since the brines are two to three times less concentrated than in Argentina. So you need a plant two to three times larger to produce the same amount of lithium. So we are working on the economic model, but in terms of resources and technical processes, I would say it works.

So that's a very French, European vision of things, but even in Europe, the first quarter we have growth rates in double digits, close to 20% in Europe for sales of electric and hybrid cars, which also have lithium batteries. Globally, you should know that in 2024, one in five cars was electric, 17 million vehicles sold. We estimate that in 2025, one in four cars will be electric, so more than 20% growth year on year. In 2024, it was +26% compared to 2023. So I heard at the end of 2024, oh the market isn't doing so well? +26%. I would like to have many markets doing that. So in fact, the electric car in the world, especially in China, is doing very well. And in China, the penetration rate of electric vehicles today is over 55%. So more than one in two vehicles sold in China is electric. And your lithium is sold to Chinese manufacturers. Today, we sell our lithium carbonate to Chinese manufacturers because not only is the electric vehicle very sold in China, but China exports batteries and exports battery materials. Today, 100% of LFP batteries in the world are made in China. And two-thirds of the NMC batteries I mentioned are made in China, and the rest is Korea and a tiny bit of Japan. So in fact, it's a market today that is essentially Asian. We have, I would say, a few percent that are made in Europe today, in terms of batteries, but not yet on the materials to power these batteries, which are an Asian monopoly and essentially Chinese.

So, it is one of the last, if not the last in the sectors of critical metals, if I exclude uranium which is a very specific business, we are the last miner in continental Europe. So from that point of view, having it in Europe is a strategic advantage for Europe, and moreover Europe recognizes it well. We are regularly consulted and involved in all strategic reflections of Europe on critical materials. The French government, which is also a shareholder of Eramet at 27%, is in full support of the group's development. So I think there is a real awareness of the strategic interest of Eramet for Europe and for France in particular. Now, we know that ores are where nature placed them, which is essentially outside Europe. And moreover, the 2030 objectives of Europe to extract on its soil 10% of metals by then, which is already ambitious since we are far from it, so we must already achieve that, and that means that 90% will be imported from elsewhere. The big challenges are securing supplies. Exactly, it's about securing supplies in the countries where we find these metals, and having European companies or companies allied with Europe that are operators in those countries and hold deposits is absolutely important. And that's all the agreements that must develop and are developing. We call that economic diplomacy, raw materials diplomacy, and we really need to hurry. Moreover, President Macron was in Indonesia not long ago. They talked about nickel and raw materials. He went to Greenland on his way to Canada. He mentioned agreements on raw materials, and so I think there is a real diplomacy being put in place on these countries which are neither China nor the United States, but we need to hurry because China has been securing its raw materials for 20 years all over the world, and the United States realized recently that they are very behind. And so we saw Donald Trump with his methods, with Ukraine, with the DRC, the Democratic Republic of the Congo. He is signing today a deal of military aid for raw materials in Congo. He is trying to do it with somewhat more aggressive methods with Greenland. In any case, they have understood very well that they had to catch up. We understood that in France, in Europe. We understood it in France, in Europe, we don't have the supplies once again in critical metals, we don't have the same methods. So we need to be more dynamic. But I think France has really understood and is a bit of a spearhead for these agreements. The European Commission is also doing it. Today, we have a commissioner in charge who is trying to multiply bilateral agreements with Latin America, with countries like Indonesia, with certain reliable countries. That's it.

I think that in fact what is happening today with Trump has created... these countries have realized that they had a real weapon rather than just selling their raw materials on the free market. They realized that they could obtain things in exchange, that they truly had a geopolitical weapon by having critical raw materials, and that they had to play that card. And they play it by making agreements for military aid, for infrastructure financing, for many things. And so today, it's no longer so easy to have free access to raw materials because the countries demand in return at minimum investments on their territory and sometimes a little more like military aid. So we need to put in place this mineral diplomacy more than absolutely trying to open plants in Europe close to us. There is no social acceptance for that. Plants, I think there is a little more acceptance. What is more difficult is traditional mining and the not-in-my-backyard syndrome. That's a bit like for wind turbines and we see the difficulties. Look at the big Rio Tinto project, the big lithium project in Serbia, the famous Jadar project. They have a huge deposit in Serbia. It was declared strategic by the European Union, by the Serbian government itself, and they have fierce opposition from the population, rightly or not? Well, people don't like having that next to them. And once again, Rio is a responsible player. Responsible mining is possible, and I try to show that it's not an oxymoron. No, it's not an oxymoron. And in fact, we need, it's true that we stayed, especially in France, very attached to our Zola-esque images that we still study at school. So responsible mining is possible, it costs a little more, takes a little more time, needs community acceptance, we need to do things differently to protect parts of the deposit because there are resources in terms of biodiversity, sensitive animals, etc. So we need to do things differently. Once again, it's a bit more expensive, takes a bit more time, but it's possible. And simply when you are in a densely populated territory, no one wants to see truck movements next to their home. And we see that today, it's not just for mining, we see it on many topics. And traditional mining has a fairly strong land footprint. That's not the case. You spoke about lithium in Alsace when we extract like that, we pump. So the land footprint is, as I said, almost nil. But having a real deposit and especially an open pit mine, and also the geology is not in Europe's favor. That's what you were telling me. It's not in Europe's favor, but that doesn't prevent having, as I said, a diplomacy or investments outside Europe. The Chinese don't have very favorable geology on their territory. They import most of their raw materials. They import their iron from Australia or Brazil. They import their manganese from Gabon or Australia. And in fact, they have tried to secure by all possible means their supply, and Europe must do the same.

Absolutely. It was a personal choice. I could have continued perfectly, and moreover my shareholders were in full support to do so. But once again, it was a personal choice. I turned 61. I said, I have a husband who is a bit older than me. We had decided to be able to spend a little more time together, and so I did two terms and then I would step back a bit. So the board asked me to remain as Chairman of the group, which I gladly do. I am very attached to Eramet, and the transformation we have done together with the teams is a great success story. And I wanted to take a little more personal time. The challenges are there, we mentioned them for this new CEO, Paolo Castellari: develop nickel production in Indonesia, lithium in Argentina and Chile maybe, all that. There are two major challenges ahead of us. There is, I said we opened two major deposits during this period. We doubled Indonesia, Argentina, we doubled the size of Gabon, we increased the size of, we haven't talked about mineral sands but we extract titanium and zircon in Senegal, we also increased the size of that deposit. So we opened, we did a lot of growth and repositioning. Now, there is a phase of extracting the full potential in terms of productivity, performance of these new deposits. So there is an operational performance axis which is the first, and obviously there is an axis of continuing growth. Critical metals, the world needs them, Europe needs them. Eramet has a lot of potential in this area, and above all it's a long-cycle industry. That is, you need at least 10 years between the time you acquire a deposit and the time you open your mine. That's about the time we took for Argentina. So the deposits we acquire today are production for 10 years from now. So the future is prepared now, and we must continue to feed Eramet's portfolio with new growth opportunities, especially in these metals of the energy transition.

Well, I said at the beginning, we are at the lowest in terms of metal prices. So that's a real issue. So unfortunately we have a stock price that is extremely volatile, linked to our results. Eramet in 2022 had an EBITDA of 1.9 billion. In 2024 we did 815 million while improving between the two. So we see that the impact of raw material prices is major for the stock on these, I would say the only satisfaction is that before, Eramet at the bottom of the cycle was rather at €20, now at the bottom of the cycle we are rather around €50. So it's a satisfaction. The bottom is an opportunity. Absolutely, it's an opportunity, and we are indeed convinced that today, when we look, in most of our businesses, we have about a third, sometimes a little more, of the industry that is loss-making. So that's not our case, but today there are many mines or raw material manufacturers suffering at current prices. So this cannot remain like this for very long, or there will be major closures and certainly no new projects that are necessary for future growth. So prices will rise. The only question is when, and with everything we described this morning at your place, it's true that it's not very conducive to the global economy. So we may have to wait a little longer, but I am convinced that the stock price will rebound.

Thank you.