Germany’s BASF considers building lithium plant in Chile

German chemicals giant BASF SE is considering a lithium processing project in Chile as European authorities and manufacturers look to strengthen ties with key suppliers of battery metals in the energy transition.

BASF is exploring the possibility of building a plant to turn lithium from Chilean salt flats into the cathode that goes into electric-vehicle batteries, according to people with knowledge of the matter. They asked not to be named given the proposal is at an early stage. BASF recently signed a deal with Wealth Minerals Ltd. that includes lithium offtake if the Canadian explorer obtains production contracts in Chile.

If the project goes ahead, Ludwigshafen-based BASF would join Chinese firms BYD Co. and Tsingshan Holding Group in developing cathode factories in Chile. In October, Tsingshan agreed to invest $233 million on a lithium iron phosphate plant that will get preferential access to local lithium. Chile entered into a similar deal with EV juggernaut BYD in April. Additional preferential lithium offtake — from Albemarle Corp.’s mine in Chile — will become available next year.

The South American nation is looking to leverage the world’s biggest reserves of lithium to move further down the battery supply chain in the transition away from fossil fuels. At the same time, Chile’s government is mandating cleaner mining methods that appeal to German automakers and their investors. Germany’s Deputy Economy Minister Franziska Brantner said in an X post on Thursday that Chile “is an extremely important trading partner for us to promote the sustainable transformation of our economy.”

(By James Attwood and Wilfried Eckl-Dorna)