French group Eramet is mothballing its lithium project in Argentina, announcing on Wednesday that its board had decided not to engage the construction of the lithium production plant.
The company had in February already placed the project on hold, citing economic and regulatory uncertainty in the South American country.
On Wednesday, Eramet said that the “considerable uncertainty in the global economy and particularly in raw materials markets", including lithium”, tripped up the project, as the miner was aiming to preserve cash by reducing investments.
The pilot plant, which has been operated for four months in real conditions on the Andean highlands, would continue its activity in order to finish collecting the process results.
Eramet said that the pilot plant had reached a high yield level to date and stressed that the ore deposit remained a valuable asset that offered the group “huge” potential in the years ahead.
“Since the discovery of this world-class deposit to the success of the pilot plant, our teams in Argentina and in France did remarkable work, being actively supported by the authorities and local communities, and the project was fully in line with expectations. This ore deposit, which is one of the most competitive in the lithium industry with the process developed by Eramet teams, remains a high-potential asset in our portfolio,” said chairperson and CEO Christel Bories.
The decision would result in the recognition of an expense of about €150-million, including an asset impairment charge. Cash outflows would amount to about €90-million in 2020, essentially corresponding to the investments already committed and to the costs to terminate contracts and to mothball the project.