Eramet takes full control of lithium project, halts battery recycling plan
PARIS, Oct 24 (Reuters) -Eramet ERMT.PA has bought Chinese group Tsingshan's 49.9% stake in a lithium mine project in Argentina, taking back full control of a project it sees as crucial for tapping demand for electric vehicle batteries, the French miner said on Thursday.
The deal, worth $699 million, was done using Eramet's available liquidity, it said in a statement.
The Centenario project, due to start production in the coming weeks, remained attractive despite a drop in lithium prices and full control would let Eramet decide how to pursue a planned second production facility, Chair and CEO Christel Bories told reporters on a call.
Tsingshan remains Eramet's partner in Indonesia where they operate a nickel mine.
In a separate third-quarter sales statement, Eramet also announced the suspension of a project to develop recycling of electric vehicle batteries in France, citing uncertainty over development of the market in Europe.
The group cut its capital investment target for this year, with cost control measures including the suspension of its mine production in Gabon announced last week in response to a sharp downturn in the manganese market.
Eramet's shares have slid to three-year lows since last week when it reduced its production targets for both manganese and nickel.
Bories said the manganese market was expected to return to normal conditions around the end of this year or early next year.
The group did not update its projection for full-year adjusted earnings before interest, tax, debt and amortisation (EBITDA), with Chief Financial Officer Nicolas Carre telling reporters metal price forecasts have been too volatile.
Eramet nonetheless reiterated its expectation for higher EBITDA in the second half compared with the first half, with Carre adding it also expected to achieve a full-year net profit.
Reporting by Gus Trompiz
Editing by Mark Potter
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