China BYD and local firm obtain quotas in lithium tender in Chile for US $ 121 million

Chile awarded two lithium mining quotas to the Chinese firm BYD and a local company as part of its efforts to boost the production of the ultralight metal used in electric batteries, the Mining Ministry reported.

Each company was awarded a quota of 80,000 tons of marketable metallic lithium, said the ministry, which specified that BYD Chile submitted an offer for US $ 61 million and Services and Operations Mineras del Norte did so for US $ 60 million.

Both the Chinese manufacturer of batteries and electric vehicles and the local company will be new players in the lithium market in Chile. Both firms presented the highest bids in the tender, which in total had five quotas of 80,000 tons for a total of 400,000 tons of marketable metallic lithium.

“Both offers are the ones that best respond to the State’s interest in increasing competition in this market and obtaining the most satisfactory collection by quota. The State will receive, without considering future payments for production, US $ 121 million for these two quotas, “said a statement from the ministry.

“The entry of both companies will increase the dynamism of the local lithium industry so that Chile can regain its position on the world stage. The awarded quotas, for a total of 160,000 tons of LME, represent 1.8% of the known lithium reserves in our country ”, he added.

Chile’s SQM, the world’s second largest lithium producer, and giant Albemarle were also in the running for awards, but received no quotas.

Before the exploration and production stage, the ministry said, the companies will have to obtain all the permits required by the authorities, “as well as generate the necessary spaces for dialogue to ensure that the projects are developed in harmony with the local communities, taking care of the environment and respecting our current legislation ”.

The tender, launched surprisingly in October last year, has been criticized by opposition politicians and the circle close to president-elect Gabriel Boric, who will take office in March and has spoken out in favor of a national lithium company.

A group of advisers to the elected president even met with the Minister of Mining and Energy, Juan Carlos Jobet, to discuss the process.

Opposition deputies tried unsuccessfully to stop the bidding with an appeal to justice. In a recent hearing with deputies in Congress, Jobet acknowledged that the outgoing government could have made more “efforts” to publicize the contest more widely.