BYD & Tsingshan pull out of Chile lithium projects
Tsingshan told Reuters in a statement that it is dropping plans for $233m project to produce 120,000 metric tonnes of lithium iron phosphate (LFP) in Chile. Meanwhile, Chile’s national assets ministry said that BYD first signalled its intent to withdraw back in January. The firm had plans to invest around $290m into building a lithium cathode plant – although BYD declined to comment.
Both projects were initially slated to enter operation later this year, following discussions between the two companies and the Chilean government back in 2023 regarding a preferential lithium price deal. Tsingshan and BYD would have had access to preferential pricing for lithium produced by Chilean miner SQM through to 2030. Chile is the world’s second biggest producer of lithium, so this represented a huge investment for the coutry.
The withdrawal of these investments has been attributed to a sharp drop in global lithium prices, which the Chilean government agency Corfo said hindered the economic viability of the projects. In a statement, Corfo said: “The companies selected by Corfo have been affected in their investment decisions by the global market conditions, which have shown a sharp drop in prices.”
It’s not the first time that pricing deal-based lithium investments have fallen through in Chile. Back in 2018, Chilean chemical company Molymet, Chinese firm Sichuan Fulin Transportation Group, and a Korean joint venture between Posco and Samsung all withdrew their plans for various reasons.
The government does not appear to be giving up, however. Last week, Corfo opened a second bidding process for a similar scheme, this time to provide a purchasing deal with US lithium producer Albemarle through to 2043.
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