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Chile to seek bidders for preferential pricing on lithium by July
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Chile to seek bidders for preferential pricing on lithium by July
May 16, 2024 11:49 AM

SANTIAGO, May 16 (Reuters) - Chile will open calls by

the end of July for lithium component producers to obtain

preferential pricing on lithium produced by Albemarle through

2043, government officials said on Thursday.

Albemarle and and SQM are the two

current lithium operators in Chile, and their contracts

stipulate that a part of their output will be awarded at

preferential prices ​​to companies that keep investment in

Chile, the world's second largest lithium producer.

The strategy announced by President Gabriel Boric last year

is in part aimed at spurring local investment in technologies

using lithium, including batteries and battery components.

The head of Chile's economic development agency CORFO,

Jose Miguel Benavente, said a dozen companies from various

countries are interested in obtaining lithium through the

Albemarle offering, positioning Chile to take a bigger role in

the global supply chain of battery components, whether for

electric vehicles or other types of energy storage.

CORFO last year awarded preferential pricing contracts for

lithium produced by SQM to Chinese electric-vehicle maker BYD

and China's Tsingshan Holding Group, both contingent

on plans from the companies to develop battery parts in Chile.

On Tuesday, BYD told Reuters it was postponing plans for a

2025 lithium cathode plant in Chile over "uncertainty," without

providing details.

Benavente told reporters that government officials were

helping BYD search for a site to build the plant, and said that

the EV maker has the option to negotiate directly with SQM over

pricing.

He said BYD has so far fulfilled its obligations to

access the SQM preferential pricing, but must begin production

in 2025 to maintain the contract.

Chile initially had a bidding process for preferential

prices on Albemarle production in 2018 with three companies, but

the deal fell through following problems with supply and prices.

The new process follows the resolution of a four-year

dispute between CORFO and Albemarle, in which Chile gave

Albemarle the ability to increase its lithium production by

nearly 50%, contingent on developing new technology aimed at

more environmentally friendly extraction.

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