Chinese steel group Tsingshan investing $375M to build lithium plant in Argentina with Eramet

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China’s Tsingshan, the world’s largest producer of stainless steel, will invest $375 million to build a lithium plant in Argentina with French multinational mining and metallurgy company Eramet. The two companies have partnered before, with the Weda Bay Nickel project in Indonesia.

The construction of the plant, with an annual production of 24,000 tonnes of lithium (LCE), will start during the first quarter of 2022 with a commissioning scheduled for early 2024.

Eramet will control the project, with a 50.1% interest, and will retain operational management responsibility; its partner Tsingshan is financing the plant construction in exchange for 49.9% interest in the project. Volume produced will be marketed by each shareholder based on their respective shareholding in the project.

The size of the deposit will enable further capacity expansion to be considered through the construction of other similar plants by the two partners.

Our decision to carry out our lithium project in Argentina is in line with the dynamic of strong market growth. It is a key milestone in the deployment of our strategic roadmap which aims at positioning Eramet as a reference player in metals for the energy transition. Eramet will thus become the first European company to operate a sustainable and large-capacity lithium industrial complex: we take pride in this project and see an opportunity for Europe’s sovereignty to secure tomorrow’s critical metals.

For this project with high value creation potential, our partner Tsingshan will provide its industrial expertise and financing capabilities needed for the construction of the plant. Since the early phases of the project in 2019, the teams have remained highly committed, preserving the assets and maintaining strong relationships with all stakeholders. We are now ready to engage the site’s development in the best conditions with initial production expected from 2024.

—Christel Bories, Eramet group Chair and CEO

Background. Eramet owns perpetual mining rights over a major lithium concession, in the form of brine, located on the Andean highlands in the province of Salta in Argentina. The project consists in extracting brine from the salar and processing it into lithium carbonate.

Eramet developed its own direct lithium extraction (DLE) process that works in two phases:

  • The use of an active solid to extract and concentrate the lithium. Developed by Eramet in liaison with IFPEN (the French Institute of Petroleum and New Energies) and Seprosys, this works like a sponge, capturing the lithium contained in the brine. Fresh water is then used to release the stored lithium. To further concentrate the metal obtained, two successive processes are then conducted: nanofiltration and reverse osmosis.

  • Purification of the lithium, then reaction with sodium carbonate to convert it to lithium carbonate. Once filtered again and washed, it achieves the chemical quality of the finished product.

The competitiveness of the Eramet DLE process ranks it in the first quartile of the cash cost curve of the lithium industry (cash cost of c.$3,500/t LCE EXW), with large-scale drainable resources (nearly 10 Mt LCE). A pilot plant installed on the site in 2020 demonstrated, in real conditions, the quality of lithium carbonate produced, with very high direct extraction yields (90%).

Eramet’s process presents an advantage in terms of hydric resources use compared with projects supported by a conventional extraction process. All Eramet’s CSR standards will be applied on the activity.

The lithium project was mothballed in April 2020 at the time of the COVID-19 crisis, as the conditions were not then met to launch the construction of the plant.

Based on the partnership signed with Tsingshan, and factoring in solid fundamentals as well as excellent outlook for the lithium market, the Group’s Board of Directors has considered that the conditions are now met to launch the plant construction.