Christel Bories (Eramet) : production de lithium, question géopolitique ?

Geologically, the answer is yes. There is a lot of lithium on the planet, so there is enough lithium to power the energy transition. The problem is obviously the location of this lithium. In which part of the world will it be found? And it is found quite little in Europe or in France. There are also the economic conditions under which it can be extracted, we'll come back to that. There can be quite significant differences, particularly depending on the grade of brines or ores that are extracted, and that can vary the price extremely. And then there are the environmental conditions under which they are extracted, which can be blocking phenomena for being able to extract certain sources.

So as you were saying very well, and moreover it's not only the case for lithium. The problem with all the metals of the energy transition is that first we will need a lot of primary resources. We talk about recycling, we will need to do a lot of recycling, but recycling will come later. You have to make the first batteries first to be able to recycle them afterwards. So recycling will play a very, very small role in the first 20 years. So we will have to go extract the materials, whether it's lithium, nickel, or cobalt where they are, and it turns out they are quite scarce on our continent. And moreover, very concentrated. Nickel reserves are mainly in Indonesia. 70% of today's nickel projects for batteries are in Indonesia. 80% of future production will be in Indonesia. So we see that if we don't have agreements and a partnership with Indonesia, if we don't have European actors investing in Indonesia, we can have sovereignty problems for lithium. So you were talking about more than 60% of world reserves, about two-thirds are in a small triangle called the lithium triangle: northern Chile, northern Argentina, southern Bolivia. And it's the same with these countries. So we need both economic actors who invest in these countries and economic diplomacy from Europe and France to make agreements with these countries.

So the awareness, I think it's there now. It was a difficult birth. We did it later than other regions of the world. It was linked to the various crises we experienced: the health crisis, the Russia-Ukraine crisis, the inflation crisis. Today we realized we had dependencies that were unbearable. So effectively the awareness is there, but the tools are not yet there. And that's where China and the United States are moving faster. They have taken the lead, particularly in project financing and in this famous economic diplomacy in which they are very active, and in which Europe is just starting. The Critical Raw Materials Act in Europe, the fund is being set up in France, but the tools are just starting and are not yet operational. So for now we don't have an impact yet.

Well, listen, China is playing its cards. It's no coincidence that it made this announcement at the time of a high-level meeting. And it has just shown that when it controls its value chain, it can play with it. And today, most metals, even if they are not extracted in China because China is not richer than Europe in raw materials, but on the other hand, it has taken control of mines elsewhere in the world and, above all, it refines most of the critical metals for the entire world. Yes, there really is a sovereignty of critical materials that is being put in place. So with China having taken the lead on all of them, whether it's rare earths, nickel, lithium, cobalt, especially the battery value chain, where the Chinese really want to play an important role. And for them, effectively taking control of the entire value chain allows them to be extremely competitive and ultimately make electric cars that are cheap and that are sold very competitively on our markets. So that helps them have a competitive global value chain.

Effectively, today China has built a competitive value chain and it will be quite difficult to move it. On this, the Americans use their leverage, their striking force vis-à-vis other countries with their friendshoring system to create links, as you said, a certain diplomacy to give themselves preferential access. They did it with Australia, they are doing it with other countries. Preferential access to countries that have raw materials. So Europe must once again hurry, choose quickly, finance projects of its own European actors, and launch this diplomacy, along with the regulation that goes with it. Because Europe has a big advantage it can use: its market of 450 million consumers who will buy electric cars. If it imposes standards on where the metals come from, under what conditions they are extracted, then the entire global value chain will have to respect those standards. So it has a real role to play, and it can play it. There is still time.

Absolutely. So we have a very large deposit in Argentina, which is one of the largest lithium deposits in the world, at 75,000 tonnes. That's the target production of lithium by 2027-2028. We start the first tranche with 25,000 tonnes, which will be in start-up in the second quarter of next year. And then we are launching two subsequent phases that will allow us to increase capacities gradually. It's an extremely rich deposit, and we have a differentiating technology because it is much more resource-efficient. The recovery rate is over 90%, while traditional methods have recovery rates barely above 50%. So we have to pump twice less to extract the same amount of lithium, and above all we are much more careful and preserve much better the water, which is an absolutely rare and vital resource in this region of the world. In Alsace, they are also brines, but they are geothermal brines in the Alsace plain, which unfortunately are much less concentrated in lithium than what we find in Latin America. But given the geothermal energy and the fact that we can combine the two, there is something to do. It will be very green lithium, and we won't have as large quantities, but we can extract lithium profitably from geothermal brines in Alsace, and we are working on it with Électricité de Strasbourg.

Well, in fact, if you extract the brine, capture the lithium, and reinject the brine into the aquifers, you are not pumping the water resource. So the whole objective is effectively to recycle the fresh water you use in your process and to reinject the brines once the lithium has been extracted, reinject them into the aquifers to preserve the resource. And that's why the technologies exist. They are often more expensive, but the consumer, if they really want to respond to this energy and ecological transition, will at some point have to accept paying a little more for metals that are responsible.

And in fact, once again, responsible mining is possible. We have demonstrated it, we do it every day at Eramet, with positive impact on communities, with rehabilitation, with respect for biodiversity. We return the land we have exploited by rehabilitating it completely with the same biodiversity it had before we exploited it, to the populations when we leave. So in fact, there are ways to make this exploitation sustainable. We need to convince our fellow citizens.

We effectively have in our portfolio all the metals of the energy transition. We bring a real solution to Europe's sovereignty on the subjects we have talked about. And Eramet today is refocused on mining and first transformation. It is a company that is much more robust than it was a few years ago, that has the means to do projects. We need to continue to be supported, but we are moving forward and we have many development projects. 2023 is a much less promising year than 2022. Why? Because metal prices have fallen enormously. In the first half of this year, the prices of our metals were between 30% and 40% lower than the same period last year. So we have a very strong price drop. So maybe we don't always realize it here, but effectively it will be a more complicated year. But thanks to everything that has been transformed, today we are able to withstand downturns.

Today we still have 5 billion in revenue. A good half still comes from manganese. The rest is nickel and mineral sands, including titanium which we haven't talked about much, which is a small part of our portfolio. But with lithium starting next year and all our projects in nickel and cobalt, that part will increase significantly in the coming years.

In any case, yes, it will be a big third of our activity, but we will have two-thirds in the metals of the energy transition.

Well, first we generate more cash flow, which allows us to invest. We have partnerships on very large projects with industrial actors or value chain actors, and then we raise project financing on beautiful projects. We are capable of raising financing.

It's not decarbonation. I think what you're talking about is recycling. Absolutely, but it's the end of the value chain and it's very important. I mentioned it at the beginning: all these batteries will have to be recycled afterwards to obviously not lose the metals and to transform these metals directly into battery-grade metals. That's what's complicated: extracting each metal separately and making battery-grade again. We have a process that has been experimented with, the pilot plant is starting up, and we have a partnership with Suez on collection and production of black mass. And then we have this pilot plant that should allow us to enter production by 2026 on lithium battery recycling.

So effectively, these are somewhat different things. I believe there is an element that I have placed at the heart of the strategy and that is absolutely key: CSR. That may seem a bit trivial, but as I said, it is absolutely key to be able to extract these metals in a sustainable and responsible way. And we place a lot of emphasis on protecting the environment, biodiversity, the economic impact on communities. So when you talk about the way of working, one of the transformations of the Eramet group has been to become, I would say, the most responsible actor in the market for extracting these metals. And I think that is a differentiating factor for the future.

So Gabon, Senegal, etc. In Africa, we have learned to work in Africa and I think we work well. Once again, when we bring a lot to the communities around us, we are quite integrated and protected in the countries where we are. New Caledonia is a somewhat special case. Notably because economically, even last year when everyone was making money in metals, especially nickel, the three metallurgical actors in New Caledonia lost money, which is an exception and shows that there are structural problems in the nickel and metals sector in New Caledonia. And we really need to tackle these structural problems because the New Caledonian economy will not be able to continue generating losses structurally in the future. So in everything that needs to be solved in New Caledonia, there is notably finding a future for the New Caledonian nickel sector, which today is in a dead end.

We manage to recruit because, as I said, we have this CSR dimension that attracts talent. And everything we do, particularly in the countries where we are: Indonesia, Argentina, Africa, we are really differentiating by our approach. And talents come quite easily to Eramet. I'm not saying the war for talent isn't there, everyone is looking for the same talents, but I think we have an asset that particularly attracts young people, and that is a very important element.

The message is that effectively, once again, I think our government and Europe are taking the right turns. We simply need to accelerate the pace, and that is absolutely fundamental. We are not today at the same pace as the large regions that compete with us in the world, particularly on the subjects of sovereignty and defense.