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EXCLUSIVE-Lithium giant Albemarle locks horns with Chile over reserves data

SANTIAGO, Sept 10 (Reuters) - Albemarle, the world’s largest lithium producer, is locked in a feud with Chilean regulators over how it calculates its reserves of the ultralight metal, a potential risk to its plans to ramp up production.

Regulators are demanding extra information on reserves Albemarle holds in the lithium-rich Atacama salt flat, according to a non-public regulatory filing seen by Reuters. The U.S.-based miner told Reuters that the information it has provided already goes beyond Chilean requirements.

Albemarle won approval in 2016 to hike its production from the Atacama flat, by far the biggest source of supply in South America’s so-called ‘lithium triangle.’

Its export permit requires the miner prove its reserves can sustain the increased output. That information is provided to Chilean nuclear agency CCHEN, which oversees lithium exports.

Should CCHEN decide that Albemarle is not complying with its rules, it could suspend that permit.

The high-stakes feud comes as Albemarle pushes to expand production in Chile and take control of Australia’s Greenbushes, the world’s largest lithium mine, to meet an expected tripling in demand for the key battery metal by 2025 as automakers produce more electric vehicles.

Globally, both companies and countries are racing to secure the resources necessary to ramp up EV production, including copper, cobalt and lithium.

Albemarle submitted a report in August 2019 with estimates of its Atacama reserves, documents requested by Reuters under Chile’s Transparency Act show. But when regulators questioned the firm’s methodology, Albemarle declined to provide any more detail.

An attorney for the firm wrote in a December 2019 letter that U.S. Securities and Exchange Commission rules meant Albemarle was “impeded from providing CCHEN information beyond that already delivered.”

In late August CCHEN rejected that argument, according to the filing seen by Reuters. It said the “requirements of foreign institutions are not enforceable or applicable in Chile.” The regulator has given Albemarle until Sept. 16 to provide the additional data.

The Chilean agency said Albemarle’s initial report did not include baseline data, calculations or models, making it “impossible” for the regulator to establish how the company had arrived at its resource and reserve estimates.

Albemarle said in a statement sent to Reuters that it had gone above and beyond the regulator’s requirements in its report and had invited CCHEN to its offices to review its “material and supporting documents in detail,” an invitation it said had not been taken up.

“We do not understand CCHEN’s insistence on this point,” Albemarle said in response to questions from Reuters. “We believe that it is an artificial conflict whose origin we cannot understand.”

The salt flat, home to both Albemarle and top competitor SQM , lies amid the world’s driest desert and questions remain about lithium mining’s impact on its fragile ecosystem. Carmakers including Volkswagen and Daimler have ratcheted up scrutiny of the region’s miners ahead of the expected spike in demand.

Chilean regulators said last month they were planning a new, comprehensive management plan of the salt flat. Chile’s government has also long promised, but has yet to deliver, a water study of the Atacama basin to ensure sustainability.

Albemarle has emphasized that it cares for the environment and local communities, including in the Atacama.

Reporting by Dave Sherwood; Editing by Adam Jourdan and Rosalba O’Brien

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