According to a report by Bloomberg, Chinese electric vehicle manufacturer BYD has announced that the launch of its lithium mining project in Chile remains uncertain due to ongoing negotiations with the South American country's authorities.
On August 26, BYD's Executive Vice President Li Ke stated in an interview in Shenzhen that the terms of the Chilean lithium project have not yet been finalized, and the start of production may be delayed. She added that BYD must ensure it secures "a good deal." "We are still in negotiations with the local government," Li Ke said. "The decision now lies with the government."
In April last year, BYD secured lithium carbonate from Chilean lithium producer SQM at a favorable price to supply a new factory. This factory is expected to begin producing lithium iron phosphate for battery cathodes by the end of 2025.
SQM, headquartered in Santiago, is officially known as Sociedad Química y Minera de Chile SA. It remains unclear whether BYD will be able to continue obtaining lithium at a favorable price after SQM's license expires in 2030. However, SQM has already signed a formal agreement with Chile's state-owned mining company Codelco to transfer a majority stake in its brine assets to Codelco in order to extend the validity of its operating license.
When asked about the report, Corfo, the Chilean government agency responsible for regulating lithium resources, declined to comment.
For BYD, this battery cathode material project provides a foothold in Chile, the country with the world's largest lithium reserves. For Chile, the project is part of its efforts to further develop downstream in the battery supply chain. However, as global demand for electric vehicles slows and lithium production becomes increasingly surplus, lithium prices have fallen to their lowest point in three years.
