Chile’s economic development agency, CORFO, announced on Wednesday an agreement with Albemarle to potentially boost its production quota by 240,000 metric tons of lithium metal equivalent (LME).
This significant increase would elevate Albemarle’s production quota by nearly 50%, from approximately 460,000 metric tons of LME currently.
To access this augmented quota, Albemarle must demonstrate its commitment to employing sustainable technologies like direct lithium extraction, engage in consultations with local indigenous communities, and obtain necessary environmental permits, as outlined by CORFO.
The agreement is part of a resolution reached in April, wherein Albemarle agreed to pay $15 million to settle a complaint filed by CORFO in 2021 with the International Chamber of Commerce (ICC). The complaint alleged underpayment of commissions to the state.
Albemarle, one of Chile’s two primary lithium producers, operates in the Salar de Atacama, a lithium-rich salt flat. CORFO’s Vice President, Jose Miguel Benavente, hailed the agreement as a step towards anticipating higher sustainability standards in lithium production.
Furthermore, the pact establishes new terms for determining a “preferential price” for lithium product producers in Chile, aimed at facilitating smoother negotiations with Albemarle and fostering long-term lithium carbonate supply agreements.
While some aspects of the 2016 agreement with Albemarle remain unchanged, including its validity through 2043 and the option for CORFO to acquire assets in the Salar de Atacama, the latest deal signifies a significant milestone in Chile’s lithium industry development.
