Chile is reportedly bidding for new lithium contracts, hoping to regain market share as demand surges. Chile is one of the world's largest producers of lithium after Australia and has by far the world's largest reserves.
It is understood that the local government is in the process of formulating tender rules to offer five 80,000-ton quotas to local and foreign companies for a total of 400,000-ton exploration and production contracts. The winning bidder will receive seven years of exploration and development and 20 years of production. The State will charge royalties for quota allocation and variable payments during production.
With demand for the key ingredient for rechargeable batteries expected to increase fourfold, new frontiers have opened up, but the South American country's market share has been declining. Two existing atacama companies, SQM and Albemarle Corp, are expanding, but Chilean authorities hope to accelerate supply growth by developing other new areas.
The price of lithium carbonate has recently hit a record high in China as carmakers and battery makers seek to bolster supplies of the commodity seen as crucial to the development of electric vehicles. There is growing confidence that the market has finally shaken off the oversupply that dragged down lithium prices in 2018.
"The growth in global demand for lithium and the challenge of promoting new technologies to help combat climate change and transition to clean energy is an opportunity to boost Chile's lithium industry and strengthen its strategic position for the benefit of Chile and the people of the country," Chile's mining minister said in a statement on Wednesday.
