Terrafame Q1/2025: EBITDA decreased due to lower market prices, battery chemicals production continued to grow

The financial information presented about Terrafame Ltd in this media release consists of unaudited IFRS figures. The figures in brackets refer to the corresponding period in the previous year unless otherwise stated.

January−March 2025 in brief

• Net sales were EUR 122.9 (130.0) million, representing a decrease of 5.5% year-on-year.
• Net sales from the battery chemicals business increased to EUR 46.9 (35.6) million, or 38.2% (27.4) of the company’s total net sales. The production of battery chemicals reached a quarterly record. Net sales were negatively affected by lower market prices of nickel sulphate compared to the comparison period.
• Net sales from the metal intermediates business decreased by 19.5% to EUR 76.0 (94.4) million. Net sales were negatively affected by lower market prices of metals compared to the comparison period.
• EBITDA was EUR 14.8 (39.9) million, or 12.0% (30.7) of net sales. EBITDA decreased due to lower market prices of nickel sulphate and metals. EBITDA was positively affected by the increased production of battery chemicals and improved cost efficiency. 
• The operating result was EUR -6.6 (23.6) million.
• Operating cash flow was EUR -10.0 (-3.4) million.
• The total accident frequency rate on the industrial site was 4.8 (5.0).

Key figures

EUR million	1−3/2025	1−3/2024	Change	1−12/2024
Net sales	122.9	130.0	-5.5%	544.5
Battery chemicals business	46.9	35.6	31.7%	196.7
Metal intermediates business	76.0	94.4	-19.5%	347.8
EBITDA	14.8	39.9	-62.9%	66.3
Operating result	-6.6	23.6	n.a.	-12.6
Operating cash flow*	-10.0	-3.4	n.a.	61.7
Total capital expenditure	15.8	60.2	-73.8%	211.1
Sustaining capital expenditure	11.3	33.1	-65.9%	159.6
Investments in productivity     improvement and capacity     growth	4.5	27.1	-83.4%	51.5

	31 Mar 2025	31 Mar 2024	Change	31 Dec 2024
Shareholders’ equity, EUR million	713.7	782.0	-8.7%	733.9
Work in progress, EUR million	270.4	261.8	3.3%	269.7
Balance sheet total, EUR million	1,412.3	1,344.3	5.1%	1,451.9
Own personnel, FTE	824	853	-3.4%	793
Partner companies’ personnel on average on review period, FTE	761	1,175	-35.2%	1,217
Total lost-time injury frequency rate, 12-month LTIFR1	4.8	5.0	-4.0%	4.9
Own personnel	5.1	5.3	-3.8%	5.2
Partner companies’ personnel	4.7	4.7	0.0%	4.7

*Operating cash flow = EBITDA - change in working capital

Seppo Voutilainen, CEO

The challenging market situation continued into the first quarter of 2025: the imbalance in the nickel and nickel sulphate markets persisted due to a significant increase in production in Asia. This was reflected in lower prices for battery chemicals and metals in the first quarter compared to the comparison period, negatively impacting Terrafame’s net sales and EBITDA. However, our successful price hedging partially compensated for this. The cash flow and profitability improvement programme launched last year progressed well, which had a positive impact on our result.  

We can be satisfied with our production volumes, as mining operations continued in January–March without ore extraction restrictions after the permit decisions issued by the Vaasa Administrative Court (VAC) at the end of 2024. At the beginning of the year, we were also able to catch up on the extraction volumes that had not been realised due to the permit restrictions at the end of last year, which increased operating costs and partially weakened our result in the first quarter. We once again reached a quarterly record in the production of battery chemicals, and the production of metal intermediates was at a good level.

However, the VAC’s decisions will have a negative impact on Terrafame’s operations in the longer term and will cause significant additional costs, which is why we applied for leave to appeal to the Supreme Administrative Court (SAC) in January 2025. In addition, we requested the SAC to issue an interim decision regarding key operational restrictions resulting from the VAC’s decisions. We expect the SAC to decide on the interim decision request during the first half of this year.

In February 2025, we announced a financing arrangement to fund our investment programme over the next few years. The arrangement demonstrates our owners’ and Nordic banks’ long-term commitment to and confidence in our business despite the external challenges. The significant investments currently underway also progressed during the review period, taking into account the VAC’s permit decisions and restrictions. Furthermore, the uranium recovery, initiated in June 2024, continued as planned.

Kolmisoppi, Terrafame’s yet unexploited ore deposit, was granted strategic project status in March under the EU’s Critical Raw Materials Act (CRMA). We are happy with this decision, as we see that the status will ensure that permitting processes proceed according to the deadlines set in the CRMA and thus decrease permitting-related scheduling risks.

The development of the entire battery value chain in Europe is regrettably slow, which is affecting the demand for battery chemicals in Europe. However, Terrafame has succeeded in securing new customers, including Asian operators, who value responsibly produced battery chemicals.

Uncertainty in the market environment has increased since the end of March due to turbulence in international trade and imposed tariffs, which has further reduced metal market prices. In April, the price of nickel has been at its lowest at around 13,500 USD/t, which is the lowest level since the first half of 2020. This development has also increased the risk of global product flows in the electric vehicle market changing direction, in addition to increasing market price and exchange rate volatility.

The current year marks the 10th anniversary of Terrafame’s operations. At the same time, one chapter in the company’s history came to an end in March when Lauri Ratia, who had acted as Chair of Terrafame’s Board for nearly a decade, stepped down from the Board. I would like to warmly thank Lauri for his significant work for the company. At the same time, I would like to thank other outgoing Board members Riitta Mynttinen and Jesus Fernandez and welcome the new Board members Patrick Burke and Markku Teräsvasara.

Market environment

Electric vehicle and battery markets

According to Rho Motion’s Monthly EV Battery Chemistry Assessment report, a total of around 2.45 (1.89) million electric passenger cars and light commercial vehicles were sold worldwide in January–February 2025. This represents an increase of around 30% from the corresponding period in 2024. The growth was driven especially by China, but the North American market also continued to expand. The European market returned to growth after last year’s decline. In 2024, sales increased by approximately 26% from 2023.

Sold electric passenger cars and light commercial vehicles

Million pcs	1−2/2025	1−2/2024	Change, %	2024
China	1.44	1.06	35.4	11.0
North America	0.29	0.24	20.4	1.79
Europe	0.52	0.44	19.7	3.06
Asia	0.13	0.09	48.5	0.73
Other countries	0.07	0.06	19.1	0.39
Total	2.45	1.89	30.0	17.1

Source: Rho Motion Monthly EV Battery Chemistry Assessment

Manufacturers of battery cells and cathode materials have announced investments in giga factories that will strengthen the North American and European battery markets. However, some of these projects have progressed more slowly than previously anticipated. According to Rho Motion, the global sales of electric vehicles are expected to continue to increase in 2025, albeit at a slightly more moderate pace than before. Sales are expected to increase by around 23% to 21.6 million cars.

In February 2025, including all vehicle categories, the sales-weighted average pack size was 53.5 (51.4) kWh. 

The electric vehicle battery market is clearly divided between high-nickel-content NCM batteries and LFP batteries. The market share of NCM 811 batteries, which have a high nickel content, was 23% (25%) in February 2025. The market share of LFP batteries was 49% in February 2025 (35% in February 2024).

In January–February 2025, 1.14 (1.03) million electric vehicles utilising NCM battery technology were sold. Sales increased by 10.2% compared to the comparison period. Sales of electric vehicles utilising LFP battery technology increased by approximately 64% to 1.19 (0.7) million cars sold.

In terms of gigawatt hours, the demand for NCM batteries increased by around 15% to 67.4 (58.6) GWh in January–February 2025 compared to the comparison period. The share of NCM 811 batteries increased by around 34% to 30.0 (22.5) GWh. The share of LFP batteries increased by around 74% to 63.8 (36.6) GWh. (Source: Rho Motion Monthly EV Battery Chemistry Assessment)

Nickel market

The price of nickel on the London Metal Exchange (LME) in January–March 2025 was lower than in the comparison period. The average market price was 15,571 (16,589) USD/t, which is 6.1% lower than in January–March 2024. Compared with the fourth quarter of 2024, the average market price of nickel decreased by 2.9%. 

The price of nickel sulphate (SPOT China) also fell, and the average price in January–March 2025 was 14,751 (15,418) USD/t, which is 4.3% lower than in January–March 2024. Compared with the fourth quarter of 2024, the average market price of nickel sulphate decreased by 1.2%. The spot price (SPOT China) of nickel sulphate has not been fully linked to the LME price since 2022.

The total combined nickel stocks on LME and the Shanghai Futures Exchange (SHFE) at the end of March 2025 were 235,945 tonnes, which is more than twice as much as at the end of the corresponding period in 2024 (98,605). The stocks at the end of March 2025 were 18.8% higher than at the end of the previous quarter (198,598). The stock level at the end of March 2025 corresponded to demand for 3.4 weeks (1.5). Nickel stocks have been increasing since the third quarter of 2023.

Net sales and financial performance

January−March 2025

Net sales were EUR 122.9 (130.0) million, representing a decrease of 5.5% year-on-year. Net sales were negatively affected by lower market prices of nickel sulphate and metals. Another quarterly record was achieved in the production of battery chemicals, which boosted net sales.

Net sales from the battery chemicals business totalled EUR 46.9 (35.6) million, or 38.2% (27.4) of the company’s net sales. Net sales from the metal intermediates business totalled EUR 76.0 (94.4) million.

EBITDA was EUR 14.8 (39.9) million, or 12.0% (30.7) of net sales. The operating result was EUR -6.6 (23.6) million. EBITDA and the operating result were weakened by lower market prices of nickel sulphate and metals, although price hedging softened the impact of lower sales prices on net sales and the result. Higher production of battery chemicals and improved cost efficiency had a positive impact on the result.

Operating cash flow* was EUR -10.0 (-3.4) million. Cash flow was affected by the increase in inventory and the decrease in accounts payable.

*Operating cash flow = EBITDA - change in net working capital

Key events in January−March 2025

Terrafame sought leave to appeal regarding the Vaasa Administrative Court’s decisions

On 27 January 2025, Terrafame announced that it had sought leave to appeal in the Supreme Administrative Court (SAC) regarding the decisions issued by the Vaasa Administrative Court (VAC) in December 2024. Additionally, Terrafame requested the SAC to issue an interim decision regarding key restrictions on operations. The VAC’s decisions are described in the Permits section.

In Terrafame’s view, it was important that the VAC upheld the ore extraction volume of 18 million tonnes per year. If upheld, the other provisions pertaining to the VAC’s decisions will, however, negatively impact Terrafame’s operations and cause significant additional costs. Terrafame sees that the VAC’s decisions unjustifiably undermine Terrafame’s operating conditions and create unnecessary uncertainty in the planning of the company’s operations. In the company’s view, there are weighty reasons for the annulment of the VAC’s decisions and the making of an interim decision.

Appointment to the Terrafame Leadership Team

Mr Mika Lahti, M. Sc. (Industrial Engineering), was appointed as Chief Procurement Officer and Member of the Leadership Team as of 1 March 2025. Lahti has several years of experience in procurement-related leadership roles.

The Kolmisoppi ore deposit was granted strategic project status under the EU’s Critical Raw Materials Act

On 25 March 2025, Terrafame announced that the Kolmisoppi project has been granted strategic project status under the Critical Raw Materials Act (CRMA) on 25 March 2025. With the CRMA, the European Union strives to strengthen the value chains of raw materials that are vital for Europe’s economy and clean transition.

The CRMA covers more than 30 raw materials, 17 of which are also defined as strategic. Terrafame produces battery-grade nickel sulphate as well as cobalt and copper, all three of which are defined as strategic raw materials.

Financing arrangements

On 27 February 2025, Terrafame announced that the company has negotiated a financing arrangement to fund the company’s investment programme over the next few years. As part of the financing solution, Terrafame and its main owners – Finnish Minerals Group and the Galena funds – agreed on a EUR 100 million financing arrangement consisting of a EUR 50 million shareholder loan and a EUR 50 million equity financing commitment. In addition, Terrafame agreed on a EUR 50 million advance payment arrangement with Trafigura.

In the same context, Terrafame agreed on a one-year extension to the maturity of an existing EUR 250 million bank loan agreement as well as on extending a EUR 65 million revolving credit facility previously received from Finnish Minerals Group for the same period. The new maturity of the bank loan and the revolving credit facility end in December 2028.

The amounts presented in the following table cover all the financing items received by Terrafame from its shareholders during its time of operation, as well as debt financing items converted into equity.

	Equity financing	Debt financing	Transfer/With-drawal	Converted equity	Re-payments	Debt financing	Total financing
Finnish Minerals Group	537.3	65.0	29.4	0.0	-15.0	79.4	616.7
Galena Asset Management	389.6		20.6	0.0	0.0	20.6	410.2
Trafigura	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Mandatum	47.7	0.0		0.0	0.0	0.0	47.7
Total	974.6	65.0	50.0	0.0	-15.0	100.0	1,074.6

Shares and shareholders

Terrafame has one series of shares. At the end of March 2025, the company had 5,968,655 (5,968,655) shares. Its share capital was EUR 2.0 (2.0) million, and its shareholders’ equity was EUR 713.7 (782.0) million.

At the end of March 2025, Finnish Minerals Group, a special-assignment company of the state of Finland, owned 56.1% (56.1), Galena funds owned 39.4% (39.4) and Mandatum owned 4.5% (4.5) of Terrafame.

Finnish Minerals Group’s holding may decrease to no lower than 50.1% in the future if Galena funds and Mandatum exercise all their option rights. In such a case, the holding of Galena funds would be around 45.0% and the holding of Mandatum around 5.0%. 

Governance

Terrafame’s Annual General Meeting (AGM) was held on 25 March 2025. The AGM adopted the financial statements for 2024, decided on profit distribution in accordance with the Board of Directors’ proposal and discharged the members of the Board and the CEO from liability.

The AGM confirmed the number of Board members as six. Matti Hietanen, Julian Sanchez, Peter Schuhmacher and Jyrki Vainionpää were re-elected as Board members, while Patrick Burke and Markku Teräsvasara were elected as new Board members, the latter as of 15 May 2025. Markku Teräsvasara was elected as Chair of the Board as of 15 May 2025 and Matti Hietanen as Vice Chair, with the latter acting as Chair of the Board until 14 May 2025. Lauri Ratia, Jesus Fernandez and Riitta Mynttinen had previously announced that they were not available to be elected as members of the Board.

The AGM decided to keep the Board members’ fees unchanged. The annual fee for the Chair of the Board is EUR 72,000. The annual fee for each member of the Board is EUR 36,000. In addition, the Chair and members of the Board are paid EUR 600 for each Board meeting or Board committee meeting they attend.

KPMG Oy Ab, Authorised Public Accountants, was elected as the auditor, with APA Toni Aaltonen as the principal auditor.

Personnel and partner network 

Around 2,000 people work regularly on Terrafame’s industrial site. Terrafame had 824 (853) full-time equivalent employees (FTE) at the end of March 2025.

An average of 761 (1,175) people (FTE) employed by contractors and subcontractors worked on the industrial site during the review period. The decrease was mainly due to a pause in construction work on the new secondary leaching area, as well as the transfer of some work to Terrafame’s own personnel as part of the implementation of the cash flow and profitability improvement programme.

Permits

On 20 June 2022, Terrafame announced that it had submitted its environmental permit application for the exploitation of Kolmisoppi and the expansion of the mining concession to the Regional State Administrative Agency for Northern Finland. Kolmisoppi, which remains unexploited, is the second ore deposit located in Terrafame’s mining concession. Including Kolmisoppi, Europe’s largest nickel ore reserves are located in Terrafame’s mining concession in Sotkamo. In addition to nickel, zinc, cobalt, copper and uranium are also recovered from the ore.  Since 2021, nickel and cobalt have been processed into battery chemicals at the company’s battery chemicals plant for use in electric car batteries.

On 17 February 2023, the Regional State Administrative Agency for Northern Finland decided to not process the Kolmisoppi project permit application. A key obstacle to processing the permit application in accordance with the scope of the application submitted in June 2022 was the fact that the procedure to deviate from the objectives of the water management plan requires a legislative amendment, which was still under preparation when the permit application was submitted. The legislative amendment entered into force from the beginning of the year 2025.

Terrafame decided to change the Kolmisoppi project plans so that the project will proceed in two phases. In the first phase, the company will apply for a permit to exploit the ore deposit in the Kolmisoppi land area, with mining scheduled for 2028–2033. The first-phase permit application was submitted to the Regional State Administrative Agency for Northern Finland in the summer of 2023. In the second phase, Terrafame will apply for a permit to expand the mine into the water area, with mining scheduled for 2040–2050. Between 2033 and 2040, mining will take place in the current Kuusilampi mine.

In August 2024, Terrafame applied for a strategic status for the Kolmisoppi ore deposit as part of a supply chain that complies with the EU’s Critical Raw Materials Act (CRMA). The Kolmisoppi project was granted strategic project status by the European Commission on 25 March 2025. The status was granted to the Kolmisoppi project in full, including the water area excavation.

In December 2024, Terrafame received two final decisions from the Vaasa Administrative Court (VAC), one of which concerns the environmental and water permit covering all of Terrafame’s operations, i.e. the main permit, and the other concerns the KL1 waste rock area. The Regional State Administrative Agency for Northern Finland gave a permit decision on the main permit in 2022 and a permit decision on the KL1 waste rock area in 2023. In January 2024, the VAC issued interim decisions on the above-mentioned permits, restricting the ore and waste rock extraction volumes, among other things.

In its final decisions, the VAC confirmed the increase in the ore extraction volume to 18 million tonnes per year, approved earlier by the Regional State Administrative Agency for Northern Finland, but restricted the waste rock extraction volume to 30 million tonnes per year. In its own decision, the Regional State Administrative Agency for Northern Finland had approved an increase in the waste rock extraction volume from 30 million tonnes to 45 million tonnes per year. The VAC’s decisions partly restrict the construction and use of the new secondary leaching area SEK5−8 and the new waste rock area KL1.

On 27 January 2025, Terrafame announced that it has sought leave to appeal in the Supreme Administrative Court (SAC) regarding the decisions issued by the Vaasa Administrative Court (VAC) in December 2024. Additionally, Terrafame has requested the SAC to issue an interim decision regarding key restrictions on operations.

Near-term outlook

• The battery chemicals market is expected to continue to be challenging in 2025, but Terrafame’s production process enables flexible operations also in the intermediates market.
• The price development of base metals and battery chemicals involves considerable uncertainty.
• The development of safety at work, operational efficiency and profitability will continue.
• Terrafame is awaiting an interim decision on key permit matters from the Supreme Administrative Court in the first half of 2025.

Further information
CEO Seppo Voutilainen, Terrafame Ltd, tel. +358 20 7130 800 (switchboard), seppo.voutilainen(at)terrafame.fi

A Finnish-language webcast will be held on 25 April 2025 at 12:00 noon EEST. At the event, Seppo Voutilainen, CEO of Terrafame, and Ville Sirviö, CFO, will discuss the company’s performance. The webcast can be followed live at terrafame.videosync.fi/q1-2025. Questions can be submitted using the form at the bottom of the page.

Terrafame enhances low-carbon mobility by delivering responsibly produced battery chemicals to the global battery industry. One of the world’s largest production lines for chemicals used in electric vehicle batteries is located on Terrafame’s industrial site. The plant is capable of producing nickel sulphate for around 1 million EVs per year. The carbon footprint of the nickel sulphate produced by Terrafame is among the smallest in the industry.

Terrafame’s integrated, unique and energy-efficient production process from the mine to battery chemicals is located on a single industrial site. It provides customers with a transparent, traceable and truly European battery chemical supply chain.

Terrafame Ltd was founded in 2015. Its net sales in 2024 were EUR 544.5 million. Around 2,000 people work on its industrial site, approximately 1,200 of whom are employees of partner companies.