Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Sibanye-Stillwater (JSE: SSW, NYSE: SBSW) is limiting the financial outlay at its loss-making Sandouville nickel refinery in France as it looks to convert the facility for the production of pre-cursor cathode active material (pCAM) used in lithium-ion batteries.
The company acquired the Sandouville refinery from Eramet SA in 2022 with a view to producing nickel sulphate, targeting the European battery supply chain. Since then, it has considered repurposing the plant’s existing chloride processing infrastructure to produce pCAM — known as the GalliCam project.
In March of this year, Sibanye confirmed through a scoping study the potential of the GalliCam project, and a pre-feasibility study is currently underway. A positive outcome from definitive feasibility studies, it said, will enable a final investment decision on the repurposing of the Sandouville refinery to pCAM production.
To date, the outlook of the GalliCam project is encouraging, the miner added.
Achievements since the first quarter of 2024 include the successful production of pCAM at the Sandouville plant on a laboratory scale. In July, the company made an application for a patent for a novel pCAM production process.
This process, said Sibanye, will enable pCAM to be produced directly from mixed hydroxide precipitate (MHP) in a chloride medium, allowing for fewer production steps, lower energy consumption, reduced carbon emissions, and generation of fewer waste products compared to existing sulphate-based processing routes.
This chloride-based process is expected to contribute towards competitive pCAM production costs from Sandouville, it added. The production process, which is still under development, was conceptualized and designed by Sibanye’s internal team in the European region.
According to Sibanye, the GalliCam project offers the Sandouville refinery a brownfield alternative to leverage the existing chloride facility and skills base into producing pCAM for the European market using a different feed source, MHP, to the nickel matte currently being refined at the Sandouville refinery.
To address the Sandouville refinery’s projected losses and to prepare it for potential production of pCAM, the South African miner has reached an agreement to terminate a key commercial supply contract that was ending before the end of 2024. The termination cost is approximately $37 million.
Meanwhile, refining of inventory and sales will continue into early 2025, and negotiations to terminate other related contracts are ongoing, Sibanye said, adding that there will be no changes to the Sandouville refinery’s production guidance for 2024.
“Despite the significant operational and cost improvements achieved recently, the Sandouville refinery remains loss making and, as such, we thank our partners for their understanding and consideration in allowing for the consensual cancellation of the supply agreement,” Sibanye CEO Neal Froneman said in a news release.
“We are excited to be progressing with our battery metals strategy of developing downstream exposure to Europe’s battery metals value chain. We look forward to working with all stakeholders, including the French authorities, to build a leading pCAM facility in Europe.”
The results of the current PFS will determine which activities will be undertaken at the Sandouville site during 2025 to 2026, the company said.
The purpose of the GalliCam project is designed to be part of the EU Green Deal and energy transition solution. It will contribute to the objective of the Critical Raw Materials Act, of having 40% refining capacity and 15% recycling of European demand on European soil.
Sibanye has said it will be applying for EU grants as well as French and regional funding for the project.
