PARIS, April 8 (Reuters) – French mining and metals group Eramet has decided to stop work on a lithium production project in Argentina, aimed at shifting the group’s focus towards electric vehicle minerals, due to economic uncertainty created by a coronavirus epidemic.
Eramet had already put the project on hold in February, citing economic and regulatory instability in the debt-stricken South American country, and it said on Wednesday the COVID-19 crisis had now led it to take a longer term decision to halt the planned construction of a lithium production plant.
The move will result in a cost of some 150 million euros ($163 million), including an asset impairment charge, and cash outflows of approximately 90 million euros in 2020, it said in a statement.
Chief Executive Christel Bories has targeted battery minerals such as lithium as a way to reduce Eramet’s reliance on the steel industry, which absorbs most of its historical nickel and manganese output.
The company said a pilot plant at its lithium mine in Argentina would continue to carry out tests after initial results showed high yields.