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Lawmakers in Chile ask court to halt bidding on lithium mining contracts

January 5, 2022

Lawmakers in Chile are attempting to halt the outgoing government from taking bids for lithium mining contracts. Reuters reported that lawmakers from the PPD party, a center-left party, asked the Santiago Court of Appeals to stop the surprise bidding process, which will end in mid-January.

SQM and Albemarle, the world’s two largest producers of lithium are in the running for projects in Chile.

It has been criticized by people close to president-elect Gabriel Boric, who has said Chile should not repeat its “historic mistake” of privatizing resources such as lithium, a vital ingredient of electric car batteries.

“What the government of President Sebastián Piñera is doing is putting the general interest of the nation at risk,” said Raúl Soto, a deputy and one of the promoters of the appeal.

“It is putting business and private interests ahead once again over the interest of all Chileans to have security and, under state administration, with a natural resource as strategic and as important for the future of Chile as lithium,” he added.

In October, Chile announced the auction process to award operating contracts to explore and produce 400 kt (440,000 st) of lithium metal for batteries, in a bid to boost production and meet global demand.

Since then, Boric won an election on pledges to fund more social programs and reduce inequality.

The Chilean SQM and the giant Albemarle are two of the five companies contending for the contracts.

The deputies said the bidding also violates regulations on consulting indigenous communities near the site of any mining in the Atacama Desert, in the north of the country.

The government defended the bidding process, arguing it has been transparent and saying the companies will be partners of the state in any mining venture. It said the five quotas in the bidding correspond only to 4.4 percent of Chile’s known reserves of the metal and do not prevent the creation of a national lithium company.

“Until 2016 Chile was the world's largest producer, with 37 percent of the market. But today we fell to 31 percent and we have been overtaken by Australia. If we do not manage to increase production, by 2030 we will have fallen to 17 percent,” Juan Carlos Jobet, the Minister of Mining and Energy, wrote on Twitter.

The official said the government plans to talk with Boric's team, which will take office in March, to review the background of the process.

 

 

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