Appeals court suspends lithium contracts in Chile

January 17, 2022

Two lithium contracts that were award by the outgoing Chilean President Sebastian Pinera were suspended by an appeals court.

Reuters reported that an appeals court ordered the suspension, which was requested by the regional governor of the Atacama region and local indigenous communities.

Chile had previously awarded lithium quotas of about 80 kt (88,000 st) of lithium to two companies: Chinese automaker ByD Co Ltd and the local firm Servicios y Operaciones Mineras del Norte for a combined total of over $120 million.

The court ordered the suspension of the lithium auction while the claims, which were not detailed in the court decisions, are resolved by the judiciary.

Chile’s mining ministry, which organized the lithium auction, said that it was analyzing the decision. It added that the order “does not mean the final cancellation of the auction. It just implies that it is temporarily suspended as the legal claim is resolved.”

The auction, which allocated two quotas of a planned total of five, has been controversial among Chile’s left-wing politicians, with lawmakers trying unsuccessfully to block the auction.

Incoming left-wing President-elect Gabriel Boric, who will take office in March, has criticized the auction and said he wants to create a state lithium company to exploit the metal.

Chile, the world’s top copper producer, already has a state-owned copper corporation that is the world’s largest producer of the red metal.

Chile’s lithium sector is dominated by two firms, Sociedad Quimica y Minera de Chile and Albemarle, both of which participated in the auction but have so far been unsuccessful.

Chile is the world’s No. 2 lithium producer and has the largest reserves in the world.



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