How lithium-rich Chile botched a plan to attract battery makers
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.
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.
China’s Sichuan Fulin Transportation Group Co, meanwhile, has yet to get its planned Chilean factory off the ground. Fulin did not respond to requests for comment.
The deals hinged on the globe’s top producer of lithium – Albemarle Corp – boosting output from its Chilean operations to supply the planned factories. But Albemarle’s expansion has been hampered by technological and regulatory hurdles. The U.S.-based miner has feuded with Chile’s government over the price battery makers would pay for its lithium. And it does not produce lithium hydroxide in Chile, the type of processed lithium required by POSCO-Samsung.
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.
(By Dave Sherwood)