French mining firm Eramet is suspending plans to build a battery recycling plant in northern France as Europe’s electric vehicle (EV) sector struggles. Despite this, it's taking back full control of a lithium mine project in Argentina – crucial for tapping global demand for EV batteries.
Eramet was looking to build two plants in the northern town of Dunkirk as part of the ReLieVe project – a facility designed to separate minerals from the black powder formed when used EV batteries are processed.
On Thursday, the company announced the suspension of ReLieVe "until further notice". This marks the second such project in France to be halted within a month, following a similar decision by carmaker Stellantis and mining group Orano.
Although the European Union has banned the sale of new combustion-engine cars from 2035 to cut carbon emissions, the EV transition is hitting roadblocks. While France saw record EV sales last year, demand across Europe has slowed, with consumers increasingly opting for cheaper Chinese-made imports.
“The electric vehicle battery value chain in Europe is having a difficult start,” said Eramet's executive vice president Geoff Streeton n a statement.
He explained that the slow development of European battery factories and their components has left the company unable to secure the necessary raw materials for its recycling facility.
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From metal to chemical
Eramet had expected to source materials from production offcuts at new battery factories being built in northern France. However, despite the French government's push for "reindustrialisation", setbacks are mounting in the EV sector.
Sweden’s NorthVolt has laid off staff and is scaling back operations, while ACC – a partnership between TotalEnergies, Mercedes-Benz and Stellantis – opened a "gigafactory" in northern France last June. Plans for additional plants in Italy and Germany are on hold.
Eramet CEO Christel Bories said these delays had led to “many postponements of projects in the battery value chain”. One major issue is that metals like nickel, cobalt, and lithium need to be transformed into chemicals before they can be used in batteries.
However, “no cathode precursor projects have been confirmed on European soil”, Bories said – making the economics of the project unfeasible if materials had to be exported to Asia for processing.
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Banking on Argentina
While the French battery sector struggles, Eramet is banking on its lithium project in Argentina. On Thursday, the company announced it would buy out Chinese group Tsingshan’s 49.9 percent stake in the Centenario lithium mine project in a deal worth $700 million.
Despite a drop in lithium prices, Bories said the Centenario project remains attractive, with production due to start in the coming weeks. Full control will allow Eramet to decide how to proceed with a second production facility.
The mine is expected to produce 24,000 tonnes of lithium carbonate annually – enough to power 600,000 EVs.
Meanwhile, Suez, Eramet's partner in the ReLieVe project, confirmed it will continue with its own plans to build a facility outside Paris to break down used car batteries.
