Eramet increases its capital to break into the lithium sector in Chile

The European group decided to increase the capital of its local subsidiary, Eramet Chile. A month earlier, the company had agreed to acquire the Siete Salares project in Chile for the same amount.

Two companies extract and commercialize lithium in Chile, both in the Atacama salt flat: the American company Albemarle and SQM, a Chilean company whose shareholders include the Chinese company Tianqi. Another player intending to break into the Chilean market is the French Eramet, a group that in November agreed to purchase the properties that are part of the Siete Salares project, a company owned by the Vechiolla family and the international Talyson, where Tianqi and Albemarle are partners. Eramet then agreed to a payment of US$ 95 million.

A month later, the transaction saw its natural outcome. The company Eramet Chile, incorporated last year, increased its capital from the symbolic figure of Ch$ 1 million to Ch$ 84,936 million. It was on December 27 at a shareholders' meeting that this almost fully paid-up capital was determined. At the exchange rate at the time, the amount equaled the US$ 95 million paid for Siete Salares.

Eramet has formally tried to enter the lithium business in Chile since at least 2017. That year the lobbying platform reports a meeting with Corfo authorities to “learn about opportunities in lithium in Chile”. The multinational has repeated that it has been open to partnering with the Chilean State, but under a condition not accounted for in the current government's national lithium strategy: Eramet will only participate in projects it controls.

The French company incorporated Eramet Chile on May 11, 2023, three weeks after the announcement of the new national lithium strategy, announced by President Gabriel Boric on April 20. The Chilean subsidiary was incorporated with two shareholders, Eramet S.A. and Eramet Litiuhm SAS. The latter owns 99.9% of the Chilean part.

Days later, its first board of directors was formed, composed of Huber Porte, president of Eramet Chile; Miguel Fuentes Boggiano, Eramet's vice-president of project development; and Christophe Thillier, geologist and director of exploration and new projects at Eramet.

Shortly thereafter, Eramet opened an operational office in Chile “to streamline the management of investment projects, both technically and commercially,” Miguel Fuentes told Pulso in June 2023.

In Argentina, together with the Chinese company Singshan, Eramet is building a plant in the Centenario Ratones salt flat, located in Salta, where they have invested US$800 million.

In November, Eramet reported that it acquired close to 120,000 hectares (296,500 acres) from the Siete Salares project, although in previous presentations made by third parties, the project reported mining properties in seven deposits in the regions of Antofagasta and Atacama, for a total of 40,000 hectares. It had 16,500 hectares in Salar La Isla, in addition to Agua Amarga (3,100); Parinas (5,400); Grande (4,000); Aguilar (8,800); Piedra Parada (1,500) and Maricunga (104). The most attractive deposits are Aguilar and La Isla, due to their size and lithium concentration.

The partnership approach was voiced a few months ago by the Peruvian Miguel Fuentes Boggiano, director of Eramet Chile. “We are a flexible company. The lithium policy has provided all players with a workable framework. There is talk of the State having a majority share in strategic salt flats, 50.1%. Then, for non-strategic ones, ownership may vary. Our experience partnering with States is where they have a minority share of the assets. If such conditions need to vary, we are willing to explore the possibilities, work on them, and obviously reach an agreement that is beneficial for all parties involved”.

Source: La Tercera.