Chile, which has the largest lithium reserves in the world, would be one step closer to becoming an electric vehicle battery manufacturing center.
Our country expects battery manufacturers such as Samsung SDI and POSCO to start installing lithium recycling companies by the end of the year, according to Corfo's Deputy CEO Sebastian Sichel. The agency recently reached an agreement with the main lithium mining company Albemarle Corp. that will give battery manufacturers access to a cheaper lithium producer.
"We want manufacturers to be closer and closer to full battery production in Chile … this is our dream," Sichels said in an interview with Santiago. "We don't know if we will ever produce vehicles, but we would like at least to see that battery components are made in Chile, perhaps even the whole battery."
Chile is the second largest lithium producer in the world, a fundamental mineral used to power rechargeable batteries used in electric cars. So far, it has only been able to export raw ore to countries like China or South Korea, where most of the batteries are produced. But over the past two years, the government has been trying to encourage manufacturers to develop and process lithium in Chile. The effort could soon bring fruit, Sichel said.
Corfo has signed agreements with both mining companies operating in Atacama's salt apartment, forcing them to sell 25% of their production at a favorable price to companies that convert lithium to Chile. By adopting this condition, Albemarle and SQM were allocated the largest production quotas needed to meet the growing global demand for lithium.
The agency will offer offers from companies interested in buying a SQM 25% quota by the end of March and expects the winners to be announced by the end of the year, Sichel said. This process will be similar to what Corfo did in 2017 and 2018 when it launched the auction for battery manufacturers to buy the Albemarle lithium at a good price.
Although the first auction winners were announced almost a year ago, Corfo and Albemarle disagreed on the terms of the contract. Now that the two sides have agreed on a formula for calculating the preferential price, the company will have to agree on precise terms of lithium sales with each company, Sichel said, adding that the construction of lithium refineries is expected to take about a year
The auction winners Molymet, Samsung SDI and the POSCO consortium and China's Sichuan Fulin Industrial Group promised to invest more than $ 750 million. They will transform lithium salts, known as lithium carbonate and lithium hydroxide, into lithium cathodes that are a cleaner form of this white material.