Chinese companies Tsingshan and BYD withdraw from lithium projects in Chile
Photo: Wikimedia Commons.
According to a report by Reuters, Chile’s economic development agency announced that both the metallurgical group Tsingshan and the electric vehicle company BYD, from the People’s Republic of China, have decided to withdraw from lithium cathode plant construction projects in the country.
It is expected that, with the departure of these two companies and the loss of their capital, the Chilean government’s goal of increasing domestic lithium processing will be compromised, making it more difficult to meet the initially planned deadlines. It is worth noting that Chile is currently the world’s second-largest producer of lithium, a key mineral for the development of batteries for electric vehicles.
Specifically, the Chilean agency stated that two projects were affected by the decision of these Chinese companies. In 2023, both had been selected to access a preferential pricing agreement for lithium, aimed at attracting greater foreign investment to the country.
In an official statement, the agency explained that the selected companies chose to withdraw their investments due to the current international market context, where lithium prices have significantly decreased.
Tsingshan, for its part, told Reuters that it had decided to abandon a project that aimed to produce about 120,000 metric tons of lithium iron phosphate, with an estimated investment of 233 million dollars.
BYD, in contrast, did not comment on its withdrawal. However, in 2024 it had reported that a lithium plant project in which it was involved, estimated to have a capacity of 50,000 metric tons of lithium iron phosphate and a value of approximately 290 million dollars, was experiencing delays.
Chile’s 2018 plan, which aimed to attract investment to the lithium sector through preferential pricing agreements, also failed to yield positive results. At the time, a joint venture between Samsung and Posco, Chilean company Molymet, and China’s Sichuan Fulin Transportation Group canceled their investments for various reasons.
The agency also indicated that one possible reason for the withdrawal of BYD and Tsingshan was that the agreements included preferential pricing for lithium produced by Chilean mining company SQM only until 2030, a timeline that may not have satisfied the Chinese companies.
In Tsingshan’s case, another reason may have been its request for a company not involved in the bidding process to assume project management, a proposal that was rejected by the Chilean agency.
Following the withdrawal of both companies, Chile’s economic development agency launched a new bidding process for a similar project, this time with the U.S. lithium producer Albemarle. In this new proposal, an alternative scheme is proposed that includes a purchase agreement, allowing both investors and Albemarle to negotiate different conditions regarding lithium pricing.
Main Source:
China’s BYD, Tsingshan scrap plans for Chile lithium plants
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