EU battery strategy for electric vehicles threatened by supply chain gaps, says Eramet

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Eramet is struggling to attract investment from its region of origin to transform its nickel, lithium and cobalt reserves abroad into battery materials and may have to turn to non-European players, said Pierre-Alain Gautier, responsible for general affairs and partnerships.

The French group estimates that it could cover 20% of the EU's nickel needs in 2030

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The French group estimates that it could cover 20% of the EU’s nickel needs in 2030

Europe is still not investing enough in the electric vehicle battery supply chain and this could leave its planned giga-factories running out of coveted minerals, French mining group Eramet said. Eramet is struggling to attract investment from its region of origin to transform its foreign reserves of nickel, lithium and cobalt into battery materials and may have to turn to non-European players, said Pierre-Alain Gautier, its director of general affairs and partnerships.

Electric vehicles are a key part of the European Union’s plans to reduce emissions. The bloc is trying to reduce reliance on battery supplies from Asia through projects with car manufacturers and battery specialists based in Europe.

However, European automakers are reluctant to invest in the production of battery materials, instead focusing on supply contracts, said Gautier d’Eramet.

“There is a risk that giga factories will be empty of materials by 2025-2030,” he told Reuters, stressing the importance of public funding to trigger investment.

“We need investors. At the end of the day, if we find Chinese, Argentinian or American partners, we will sign with them even if the supply goes to America or elsewhere.”

Europe is already constrained by a shortage of chemical groups capable of refining minerals into cathode materials, he added.

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The bloc is trying to reduce reliance on battery supplies from Asia through projects with car manufacturers and battery specialists based in Europe.

The German BASF is a company with such capabilities and has partnered with Eramet to study nickel and cobalt refining from a mine operated by Eramet in Indonesia, a first link in the battery supply chain.

Indonesia’s enormous competitively priced nickel resources are expected to cover the vast majority of global battery demand and would be critical to European projects targeting 600 gigawatt hours of battery capacity by 2030, requiring around 450,000 tonnes of nickel, a declared Gautier.

Europe should not worry about depending on Indonesia as long as it secures access to supplies, he added.

While promising a lower carbon footprint, planned nickel production in Finland, part of which has been reserved by automaker Renault, would only offer around 30,000 tonnes, he said.

The downside of emissions from coal-fired power used in Indonesia could be offset along the entire production chain, for example through the choice of processing technology, Gautier said.

Eramet’s historic nickel activities are located in New Caledonia, but the ability of French Pacific territory to meet growing demand for batteries is limited by high costs and social unrest, according to Gautier.

The French group estimates that it could cover 20% of the EU’s nickel needs in 2030, as well as 25% of the block’s lithium needs and 12% of its cobalt demand.

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It aims to revive a lithium mine project in Argentina in the coming months, which it suspended for funding reasons at the start of the coronavirus pandemic, Gautier said.

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