SANTIAGO, May 25 (Reuters) - Chile said on Wednesday that it would bring a recent dispute with fertilizer supplier SQM to court after a meeting with the company’s executives failed to produce an agreement.
The government’s statement follows an announcement on Monday in which it said it was beginning a new arbitration procedure against SQM due to alleged “serious contract breaches.”
SQM, which was privatized in the 1980s under dictator Augusto Pinochet and is still controlled by businessmen with family links to the ex-strongman, is one of the world’s largest suppliers of nitrates and lithium, with access to vast brine deposits in northern Chile.
But it has had a rocky relationship in recent years with Chile’s center-left government. In addition to the procedure announced Monday, the company is already in arbitration with state economic development agency Corfo over leasing payments.
In the most recent dispute, Corfo has alleged “serious, varied breaches of obligations in the project contract, in particular regarding the protection of Corfo’s mining property” by SQM.
In an email Corfo said that it was contractually obligated to meet with SQM before taking the most recent arbitration to court. However, the meeting ended without an agreement.
“After a brief meeting, the parties did not overcome their differences, leaving this stage of the proceedings exhausted,” Corfo said.
SQM has previously defended its record and said it would collaborate with Corfo and the arbitrator.
However, it has also flagged interest in developing ventures outside Chile in recent months, and in March signed a lithium exploration deal in neighboring Argentina.
Reporting by Gram Slattery