Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Chile’s state development agency Corfo plans to file an arbitration suit against US lithium miner Albemarle in two weeks, claiming the world’s No.1 producer of the white commodity has failed to adhere to the terms of a contract dating back to 2016.
Such document says Albemarle must provide as much as 25% of its annual production at a discount (or “preferential price”) to companies seeking to produce battery metals within Chile. This, as the country seeks to spur a value-added local lithium industry.
The country’s state development agency says the US miner has failed to adhere to the terms of a contract signed in 2016.
Corfo Vice President Sebastian Sichel told Chilean paper La Tercera last week that Albemarle’s initial price offer was too high and had violated the terms of its contract with the miner, prompting the agency to push forward with a previously announced suit to be seen by the Paris-based International Chamber of Commerce.
Earlier this month, the Charlotte, North Carolina-based company decided to put in the backburner plans to increase output capacity in its operations in Chile beyond 2021. That project would have produced lithium carbonate. Instead, the company has chosen to expand its Kemerton plant in Western Australia, which processes hard rock from the Greenbushes mine to produce lithium hydroxide.
Chile holds the world’s largest known reserves of lithium, which are found in brines, underneath vast salt flats located in the north. Brines only require enough space for evaporation to occur, which is taken care of by the sun and the expansive solid surface that is a salt flat.
In contrast, reserves in Australia, the world’s top lithium producing country according to the United States Geological Survey (USGS), are found in hard-rock sources, which make them more expensive to process than brines.
Comments
Ernie Blair
Sounds like Chile is flexing their muscles and hoping to entice either local or an international firm to produce batteries in Chile..