China’s Fulin Transportation Group became Thursday the last company
to shatter Chile’s hopes of jumpstarting its own lithium battery industry
instead of just exporting the raw material, as it has abandoned a project to
build a plant in the country’s north.
The decision, confirmed by the country’s development agency Corfo on Thursday, comes on the heels of a similar move by South Korea’s POSCO. The steelmaker said in June it was ending a joint venture with Samsung’s battery unit to build a similar facility in the country’s lithium-rich Atacama Desert.
Earlier this month, Chilean chemical company Molymet also scraps its plans.
The three companies had won a tender opened by Corfo in April 2017 to attract battery makers to set shop in the country. In exchange, the government committed to supply lithium for 27 years at a discount.
We will continue our efforts of attracting companies willing to build facilities that add value to the lithium supply chain.
Chile’s Development Agency, CORFO.
The agreements were based on an expected production increase
by US-based Albemarle Corp, the world’s top lithium producer, which has a
contract with Corfo to supply 25%of its Chilean production to companies
designated by the government.
But Albermale’s plans to boost production have been delayed
by technological and regulatory hurdles. Besides, the company does not produce
the type of processed lithium required by the likes of POSCO.
“We will continue our efforts of attracting companies willing to build facilities that add value to the lithium supply chain,” Corfo said in the statement.
A new auction, scheduled for early next year, will offer
discounted lithium from Albemarle’s competitor SQM to companies willing to
build battery plants in the country, the world’s No. 2 producer of the
white metal.
Chile, the world’s top copper producer, contains more than
half of the world’s most “economically extractable” lithium reserves, according
to the US Geographical Survey (USGS). It is also the world’s lowest-cost
producer, thanks to an efficient process that makes the most of the country’s
climate.