(Bloomberg) – Two Chinese companies abandoned their plans to develop lithium processing projects in Chile after the fall in the price of this metal used in batteries, which undermines the country’s attempts to add more value to their mining exports.
Byd Co. and Tsingshan Holding group Co. will not continue with the projects to convert lithium carbonate into cathodes for rechargeable batteries, the government confirmed on Wednesday.
The discarded investments, of which the local newspaper Diario Financiero initially reported, occur at a time when lithium producers fight to clean up their balances after the fall in prices, which have collapsed almost 90% from the historical maximum slow down.
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“These companies have withdrawn and paralyzed that investment intention,” said government spokesman Aisen Etcheverry, in an interview with CNN Chile on Wednesday. “Basically for commercial reasons linked to the global lithium market.”
In April 2023, ByD obtained access to preferential prices for lithium carbonate produced by the Chilean SQM to supply a plant that would begin to produce iron and lithium phosphate for cathodes at the end of 2025. But, given the fall of prices, the giant of electric vehicles failed to reach an agreement with the Chilean authorities on the project conditions.
In August, the executive vice president of Byd, Stella Li, said she expected the beginning of production to be delayed because negotiations continued.
Tsingshan, the metallurgical group owned by billionaire Xiang Guangda, also obtained preferential access to the Chilean lithium in 2023 for a processing project.
Catodos projects offered companies a support point in a country with the largest lithium reserves in the world, while Chile helped them to advance in the battery supply chain.
“The signatures, of course, have actually raised issues that go beyond the difficulties with the government,” said the Minister of Finance, Mario Marcel, to the press on Wednesday in Santiago. “A solution was sought, but it was not possible to achieve it. But the strategy of the lithium continues.”
Corfo, the Chilean government agency that supervises lithium reserves, did not comment immediately. The representatives of Byd and Tsingshan in Latin America did not immediately respond to comments requests.
Nota Original: BYD, Tsingshan Drop Chile Lithium Processing Projects After Rout
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