How lithium-rich Chile botched a plan to attract battery makers
- Dec 12, 2019 10:01 pm GMT
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How lithium-rich Chile botched a plan to attract battery makers, BUSINESS NEWS, JULY 17, 2019
SANTIAGO (Reuters) - In March 2018, the Chilean government unveiled big news: Corporate investors, including South Korean electronics giant Samsung, would build three factories in Chile to produce battery parts for electric vehicles.
Chile had lured the companies with an enticing offer. In exchange for helping the South American country, the world’s No. 2 miner of lithium, jumpstart its own EV battery industry, the firms would get a guaranteed supply of the coveted metal at attractive prices for nearly three decades amid a global race to lock down supplies.
Now that arrangement is falling apart. Chile’s government has failed to deliver the bountiful, bargain-priced lithium it had promised in a fast-changing market, according to a Reuters review of regulatory filings and internal documents from a state development agency.
Chilean chemical company Molymet, which had planned to build one of the battery parts factories, last week announced it is scrapping that effort; it declined to say why. That follows a similar defection by South Korea’s POSCO. The steelmaker in June said it was pulling out of a joint venture to build a Chilean plant with Samsung’s battery unit, citing worries about lithium supplies. Samsung told Reuters it is now reviewing the project.
While Chile possesses the world’s largest reserves of the “white gold”, it has not capitalized fully on those riches. Like Albemarle, the nation’s other big lithium miner, SQM, has struggled to boost output amid strong global demand, which is expected to triple by 2025. The government, meanwhile, has been slow to allow new players to enter the market.