Chinese automobile manufacturer BYD and metals conglomerate Tsingshan have terminated their plans to establish lithium processing facilities in Chile, according to Diario Financiero on Wednesday. BYD has officially submitted its withdrawal notice to Chile’s national assets ministry, while Tsingshan, through its affiliate Yongqing Technology, notified the Chilean economic development agency Corfo of its decision to discontinue the lithium battery project. Corfo confirmed Tsingshan’s withdrawal and noted that the company was not legally incorporated in Chile.
In 2023, both BYD and Tsingshan were selected by Corfo as strategic investors to develop value-added lithium products, including cathodes and batteries. The agreements offered these companies preferential pricing and assured access to lithium carbonate from SQM, Chile’s state partner and the world’s second-largest lithium producer, through 2030. In return, BYD and Tsingshan committed to a combined investment of $523 million in Chile and the creation of approximately 1,200 jobs.
However, the initiatives faced challenges such as declining lithium prices, global market volatility, and bureaucratic hurdles, which ultimately led to the abandonment of the projects before contract finalization. BYD was the first to express concerns, citing delays in acquiring land for its planned $290 million cathode plant in Antofagasta. The facility was expected to produce 50,000 tonnes of lithium iron phosphate (LFP) annually, focusing on manufacturing the cathode component of electric vehicle (EV) batteries. Corfo acknowledged BYD’s issues and indicated that the company had sought additional information to reevaluate its plans.
BYD, recognized for its affordable electric vehicles and comprehensive manufacturing capabilities, aimed to establish its LFP cathode production in northern Chile. Meanwhile, Tsingshan, one of China’s largest private conglomerates, intended to invest $233 million in a battery facility in Mejillones, near the mining region of Antofagasta. Both projects are now officially canceled.
Chile’s lithium strategy, introduced by President Gabriel Boric in 2023, mandates that companies like Albemarle and SQM allocate a portion of their lithium output at preferential rates to firms investing in local lithium-based technologies. Despite the withdrawal of BYD and Tsingshan, Chile remains a pivotal player in the global lithium market, ranking second to Australia in lithium production.
Source: Mining.com
