Imerys: Navigating Macroeconomic Headwinds and Unlocking Value in the Emili Lithium Project

The global energy transition is reshaping the industrial landscape, with lithium emerging as a cornerstone of decarbonization efforts. As electric vehicles (EVs) and renewable energy storage systems gain traction, companies positioned to secure sustainable, responsible, and geographically strategic lithium supplies are capturing investor attention. Imerys, a French specialty mineral solutions leader, is leveraging its Emili Lithium Project and a disciplined cost structure to navigate macroeconomic volatility while building a resilient path to EBITDA growth by 2030. For investors seeking exposure to high-conviction, sustainable resource plays in Europe, Imerys offers a compelling case.

Strategic Positioning in the Energy Transition: The Emili Lithium Project

Europe's reliance on imported lithium—currently sourced from Australia, Chile, and China—poses geopolitical and environmental risks. Imerys' Emili Lithium Project, a Project of Major National Interest (PINM), is designed to address this gap. Located in the Allier region, the project integrates an underground mine, mineral concentration plant, and lithium hydroxide conversion facilities within a 50-kilometer radius. This localized approach reduces the carbon footprint by 50% compared to traditional hard-rock lithium operations and ensures a 90% recycling rate with zero liquid discharge.

By 2030, Emili aims to produce 34,000 tonnes of battery-grade lithium hydroxide annually—enough to power 700,000 EVs—positioning Imerys as a key player in Europe's lithium supply chain. The project aligns with the EU's push for critical mineral sovereignty and is supported by favorable regulatory incentives, including tax credits and access to European funding programs. With global lithium demand projected to grow at a 13% CAGR through 2035, Emili's phased development ensures scalability and long-term relevance.

Conductive Additives: Enabling Lightweighting and E-Mobility Innovation

While lithium forms the backbone of Imerys' energy transition strategy, its conductive additives business provides near-term resilience. The company's mineral-based solutions, such as HAR® talcs and NYAD® wollastonites, are critical for automotive lightweighting and EV encapsulation technologies. For instance, JetFine® ultrafine talcs reduce vehicle weight while enhancing the durability of thermoplastic components, directly supporting EV manufacturers' goals to improve energy efficiency.

In the electrical and electronic (E&E) sector, Imerys' NYAD® M150 LV wollastonite is engineered to replace glass fiber in thermoset encapsulation, improving the thermal management of EV motor systems. These innovations are part of Imerys' broader SustainAgility™ framework, which assesses products for environmental and social impact. By 2025, 75% of its product portfolio will be evaluated against sustainability criteria, with the most sustainable products earning the Imerys 'Pioneer' label.

Cost Discipline and EBITDA Resilience

Imerys' 2023-2025 strategic plan emphasizes cost discipline to offset macroeconomic headwinds. In 2023 alone, the company achieved €126 million in cost savings, maintaining a 16.7% EBITDA margin despite weaker demand. This was driven by working capital optimization, reduced capital expenditures, and a €191 million net current free operating cash flow. Such measures have allowed Imerys to reduce net debt by €548 million (-33%) since 2022, strengthening its balance sheet.

The company's focus on operational efficiency extends to its lithium projects. Emili's low water consumption and high recycling rates not only reduce costs but also align with ESG mandates, attracting capital from sustainability-focused investors. Meanwhile, Imerys' €140 million investment in lithium-ion battery materials over three years—spanning synthetic graphite and carbon black—ensures it remains at the forefront of mobile energy innovation.

Long-Term EBITDA Growth and Strategic Expansion

Looking ahead, Imerys is prioritizing strategic expansion in high-growth markets. The recent inauguration of a talc processing plant in China supports the region's EV boom, while partnerships like the one with British Lithium aim to produce 21,000 tonnes of lithium carbonate equivalent annually by 2030. These initiatives, combined with a 1.5°C-aligned decarbonization roadmap (42% reduction in scope 1-2 emissions by 2030), position Imerys to outperform in a low-carbon economy.

Investment Thesis: A High-Conviction Play in Europe's Energy Transition

Imerys' dual focus on the Emili Lithium Project and conductive additives creates a balanced portfolio that mitigates near-term volatility while capitalizing on long-term tailwinds. The company's cost discipline, sustainability leadership, and strategic alignment with EU energy goals make it a standout in a sector grappling with supply chain risks and regulatory uncertainty.

For investors, the case is clear: Imerys is not only navigating macroeconomic challenges but actively shaping the future of energy transition through innovation and responsibility. As Europe accelerates its shift to clean energy, Imerys' ability to deliver EBITDA resilience and scalable lithium production offers a compelling value proposition. With a revised commercial production timeline for Emili set for 2030 and a robust pipeline of sustainable innovations, the company is well-positioned to reward patient capital.

In conclusion, Imerys represents a rare combination of strategic foresight, operational rigor, and sustainability-driven growth. For those seeking exposure to the energy transition without the volatility of raw material commodities, Imerys is a high-conviction, long-term investment opportunity.