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By Clara Denina and Pratima Desai
LONDON (Reuters) – Prime lithium producer Albemarle (NYSE:) Corp might need to shut its Langelsheim plant in Germany if the metallic utilized in electrical car batteries is asserted a hazardous materials by the European Union, its finance chief advised Reuters.
Lithium’s pivotal function in electrical automobiles makes it an essential commodity in assembly international targets to chop carbon emissions, and it was added to the EU’s checklist of important uncooked supplies in 2020.
Nonetheless, the European Fee is presently assessing a proposal by the European Chemical compounds Company (ECHA) to categorise lithium carbonate, chloride and hydroxide as harmful for human well being.
That may lead to a extra restrictive regulatory framework for his or her use at a time when the EU is aiming to be self-sufficient in electrical car batteries by 2025.
The proposal would not ban lithium imports, but when legislated will add to prices for processors from extra stringent guidelines controlling processing, packaging and storage.
“Albemarle would now not have the ability to import our major feedstock, lithium chloride, placing your complete (Langelsheim) facility in jeopardy of closure,” stated Chief Monetary Officer Scott Tozier in an emailed assertion.
“With gross sales of roughly $500 million yearly, the financial influence to Albemarle from the potential closure can be vital,” Tozier added.
A European Fee official confirmed it was assessing the proposal, however had no additional remark.
EU member states are presently giving their views on the proposal to a committee which meets on July 5-6 to debate chemical compounds together with lithium which have been really helpful for classification as harmful. A remaining determination is predicted on the finish of 2022 or starting of 2023.
The US and Europe have accelerated efforts over the previous two years to construct safe and unbiased provide chains to chop reliance on China for key minerals utilized in electrical automobiles, wind generators and photo voltaic panels.
Tozier stated the classification would “hinder the localisation of the EU battery provide chain, and as an alternative transfer the method to a non-EU location, thereby creating the necessity to import”.
“Future battery recycling and cathode manufacturing would transfer exterior of the EU. Albemarle wouldn’t have the ability to convert supplies domestically, and any EU lithium uncooked supplies would have to be exported to create cathodes.”
Having produced lithium since 1921, the Langelsheim plant employs greater than 600 folks and accounts for 8% of New-York listed Albemarle’s projected 2022 web gross sales.
The European Fee has estimated Europe would wish as much as 18 occasions extra lithium by 2030 than in 2020, and 60 occasions extra by 2050.
“Classifying lithium as hazardous would create further burdens on how lithium chemical compounds for batteries are produced, used and recycled in Europe,” an trade supply stated.
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