Survey results have confirmed that the Beauvoir deposit has high concentrations and quantities of lithium. The projected 34,000 tonnes of lithium hydroxide per year would lead to significant reductions in lithium imports and enable France to produce nearly 700,000 electric vehicle (EV) batteries per year. France is currently committed to producing 2 million EVs by 2030.

France’s first lithium mine project is also being developed based on IRMA Standard, with underground mining methods to limit impact on natural habitat and low CO2 emissions from its operations. An electric mining fleet, underground pipelines and a low carbon energy mix are targeting CO2 emissions that are less than half the typical emissions from existing hard rock lithium operations.

The cash cost of lithium production at Beauvoir is estimated to be under US$10 per kg, which is a competitive rate in the current European market. In contrast, current lithium hydroxide CIF spot prices are trading above US$80 per kg. However, Imerys are a minimum of five years and circa US$1Bn of capital investment away from delivering that production with a lithium hydroxide price that traded at sub-US$10/kg as recently as February 2021.

This highlights the current lithium dilemma “by numbers” – for all of its supply-demand tightness, investing US$1Bn on lithium production with a price trading 8x its 2020 average is not easy maths to justify. The viability of lithium projects will always come back (eventually) to long run incentive prices. EVs will continue to drive forward demand for lithium-ion batteries and as a consequence fuel new supply of lithium as a raw material, BUT it will also drive innovation and trigger new alternative, substitute technologies if lithium prices continue to provide a high incentive price.

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