Mining Ministry notifies the awarding of a public tender to increase lithium production
Contracts have been awarded to BYD Chile SpA and Servicios y Operaciones Mineras del Norte S.A., who presented the two highest bids, which will enable the Chilean State to obtain the highest revenue per quota. Both companies are new players who do not currently produce lithium in Chile.
Chile’s Mining Ministry has notified the awarding of a public tender to boost lithium production in the country. It has chosen to award two of the five quotas that were offered to BYD Chile SpA and Servicios y Operaciones Mineras del Norte S.A.
Each company has been awarded a quota of 80,000 tons of marketable metallic lithium (MML), for which BYD Chile SpA bid US$61 million and Servicios y Operaciones Mineras del Norte S.A. bid US$60 million.
Both offers were substantially higher than the others received, and best correspond to the State’s interest in increasing competition in the market and obtaining the highest revenue per quota. Without taking future production payments into account, the State will receive US$121 million for these two quotas.
The national and international call for applications sought to increase lithium production in Chile, thus meeting the growing global demand generated by the development of areas such as electromobility. The call took place in the context of Chile’s falling market share due to the absence of new projects, despite the country having the largest lithium reserves in the world.
The arrival of both companies will increase the dynamism of the national lithium industry and allow Chile to recover its position on the world stage. The awarded quotas, totaling 160,000 tons of MML, represent 1.8% of the country’s known lithium reserves.
Before starting the exploration and production stage, the companies must obtain all required permits from the relevant environmental and other authorities. They must also create the necessary spaces for dialogue to ensure the projects are developed alongside local communities, taking care of the environment and respecting current legislation.
In addition, the Government will work with the selected companies to incorporate formulas that would allow a percentage of the companies’ required payments to be allocated to supporting local communities and R+D investments.
The Government reiterates its willingness to form a National Lithium Board to come up with an industry development strategy, with a state-focused, long-term vision.