PARIS (Reuters) – Eramet announced on Monday that it intended to continue its project to increase its lithium production capacity in Argentina and attempt to double the production of its nickel mine in Indonesia as part of a plan to investment that he considers capable of resisting the slowdown in the global economy.

The French mining group specified in a press release that it planned around 1.9 billion euros of investments over the period 2024-2026, an acceleration of its expenditure in this area compared to the 550 million planned this year.

“These investments are being made in areas that are experiencing very strong growth,” Christel Bories, CEO of Eramet, told Reuters. “Lithium is not linked to global economic growth, it is linked to battery development and the energy transition,” she added.

Eramet announced that it had approved a second phase of development of its Centenario lithium project, in Argentina, in order to produce approximately 30,000 additional tonnes per year of lithium carbonate equivalent (LCE), in addition to the 24,000 tonnes targeted in a first phase which will enter production in the second quarter of 2024.

In addition to studying a possible continuation of the second phase of Centenario, the company is exploring the neighboring Arizaro deposit, declared Christel Bories before Eramet’s first Capital Markets Day.

Eramet is developing Centenario with Chinese steel giant Tsingshan. A $400 million (€374 million) deal with Glencore to commercialize lithium from the first phase of the project will largely cover Eramet’s financing needs for the next phase, Christel Bories said.

THE SLN REMAINS IN DIFFICULTY

In Chile, the group announced the acquisition, for an initial amount of 95 million dollars (89 million euros), of a concession of 120,000 hectares of lithium in the Atacama region.

In Indonesia, Eramet wants to increase production at Weda Bay, the largest nickel mine in the world which it also operates with Tsingshan, to 60 million wet metric tons (Mth) in 2026, compared to 30 million planned this year.

The group wants to process some of Weda Bay’s ore into battery-grade nickel and cobalt in a joint venture with German chemical group BASF, with a decision expected to be made next year.

Eramet further plans to increase its ore production in Gabon, where it operates the world’s largest manganese mine, to 8.5 million tonnes in 2026, from around 7 million forecast in 2023, mainly through improved of a rail transport link.

The competitiveness of its flagship mines and the sale of less profitable metallurgical activities in recent years will allow Eramet to invest in a context of economic uncertainty in China, said Christel Bories.

“The outlook for 2024 is not very good,” she said. “That said, despite these very strong price reductions, we are managing to keep things together.”

In New Caledonia, Eramet’s SLN nickel subsidiary, however, remains in financial difficulty, with the CEO indicating that the company has initiated a new legal conciliation procedure after exhausting a final loan from the French government.

With Eramet refusing to inject more money into SLN and Glencore only providing funding until the end of February for the operation of Koniambo Nickel SAS (KNS), of which it is co-owner, the authorities must agree on measures within weeks coming to save a nickel industry battered by energy costs and political tensions, she said.

(Reporting Gus Trompiz, Benjamin Mallet, editing by Kate Entringer)

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