France's top lithium producer wants to supply Europe

As the world's leading producer, France is looking to become Europe's source for lithium, leading them to rush into the industry.

France joins the race for "white gold" as the world's biggest producer of lithium wants to sell it to Europe.

Imerys, a big minerals company with headquarters in Paris, plans to build a lithium extraction project that it hopes will help meet demand and secure supply for the growing electric vehicle market in Europe.

In a statement released on Monday, Imerys said that its Emili Project would be built in the middle of France. From 2028 onward, the company plans to make 34,000 metric tonnes of lithium hydroxide each year.

The business says that at this level of production, they could "equip about 700,000 electric vehicles per year."

Lithium, which some people call "white gold," is used in cell phones, computers, tablets, and a whole host of other gadgets that are a part of modern life. It is also an important part of the batteries that power electric vehicles.

Imerys is working on a project at a time when big economies like the EU want to increase the number of electric cars on their roads.

From 2035 on, the EU wants to stop selling new cars and vans that run on gasoline or diesel. After leaving the EU on January 31, 2020, the U.K. has similar goals.

As the need for lithium goes up, the European Union, of which France is a member, is trying to increase its own supplies so it doesn't have to rely on other parts of the world as much.

Ursula von der Leyen, president of the European Commission, said in a translation of her State of the Union speech last month that "lithium and rare earths will soon be more important than oil and gas."

Von der Leyen, who spoke in more than one language during her speech, also talked about supply security and emphasised how important it is to process.

"Today, China runs the processing industry around the world," she said. "China processes almost 90% of rare earths and 60% of lithium."

So, she said, we will look for strategic projects all along the supply chain, from mining to refining to processing to recycling. "And we'll build up strategic reserves in places where there's a risk of running out."

Back in France, Imerys said it was finishing up what it called a "technical scoping study" to "explore different operational options and refine geological and industrial aspects of the lithium extraction and processing method."

Since the end of the 19th century, the site chosen for the project has been used to make kaolin, a type of clay used in the ceramics business.

Imerys said that the cost of building the proposed lithium project is likely to be around 1 billion euros, or about $980 million.

"If the project is finished well, it will help France and the European Union achieve their goals for the energy transition," the company said. "It would also increase Europe's industrial sovereignty at a time when car and battery makers rely heavily on imported lithium, which is a key part of the energy transition."

In recent years, a number of things have put pressure on the supply of important materials for EVs. The International Energy Agency brought this up in its Global EV Outlook earlier this year.

The rapid rise in EV sales during the pandemic has put battery supply chains to the test, and Russia's war in Ukraine has made the problem even worse, "the IEA report said," adding that the prices of lithium, cobalt, and nickel have gone through the roof.

"The price of lithium in May 2022 was more than seven times what it was at the beginning of 2021," it said. "Key factors are demand for batteries that has never been seen before and a lack of structural investments in new supply capacity."

In a recent interview with CNBC, the CEO of Mercedes-Benz explained how he saw the situation with the raw materials needed for electric vehicles and their batteries.

"Raw materials prices have been very unstable in the last 12 to 18 months," Ola Kallenius said. "Some have gone up and some have gone down."

But it's true that mining and refining capacities for lithium, nickel, and other raw materials needed to make electric cars need to be increased as we move toward all-electric and electric cars and as more and more automakers enter the electric space.

"We have everything we need right now, but we need to think about the medium-to long-term and work with the mining industry here to increase capacity."