March 25, 2019 / 4:48 PM / 3 months ago

Chile launches tender for value-added lithium projects

SANTIAGO, March 25 (Reuters) - Chile said on Monday it would shortly begin accepting bids from local and foreign companies seeking to develop battery materials within the South American nation using discounted Chilean lithium provided by top miner SQM.

Chilean authorities struck a deal in January 2018 with SQM that ended a long-running dispute over royalty payments and allowed the miner to boost production from Chile’s Salar de Atacama, home to one-third of the world’s supply of the ultralight battery metal.

In exchange, the agreement included a clause obligating the company to sell lithium at a reduced price to firms that use it to produce cathode or other battery components within Chile.

Sebastian Sichel, head of Chile’s development agency Corfo, which will oversee the process, said the state would begin accepting proposals on April 5. The tender will close in November, and a winner is expected to be announced in early January 2020.

“What we’re hoping for now is that we go beyond producing lithium carbonate and finally, to begin generating returns at a more local level,” Sichel told reporters at Corfo’s headquarters in Santiago.

Lithium is a key ingredient in the batteries that power cellphones, electric vehicles and other consumer goods. Chile is the world’s no. 2 producer of lithium, but for now, primarily exports mostly unrefined lithium carbonate for use in battery production abroad.

In March, Corfo awarded contracts to Chile’s Molymet, China’s Sichuan Fulin Industrial Group and a joint venture between Samsung SDI Co Ltd and South Korea’s POSCO to produce battery components in Chile using discounted lithium provided by SQM competitor Albemarle, for a total investment of $754 million.

Those projects, delayed by a dispute between Corfo and Albemarle over pricing, began to move forward again in January, Corfo said. (Reporting by Fabian Cambero, writing by Dave Sherwood Editing by Susan Thomas)

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