Chile, a major player in the lithium market, is attracting attention from South Korean battery manufacturers looking to establish processing plants in the country, according to Karla Flores, the executive director of InvestChile, Chile’s foreign investment promotion body. The Korean companies, including Posco Holdings Inc., SK Group, and LG Corp., are interested in assisting Chile in converting its substantial semi-processed lithium reserves into materials like iron phosphate for rechargeable batteries. This initiative is partially aimed at supplying the US market.
Flores stated that there is a possibility of Korean projects in Chile exporting lithium cathodes to the US. Chile, with the world’s largest lithium reserves, aims to move further down the value chain. Last year, Chinese firms secured preferential prices for lithium carbonate from SQM, the world’s second-largest lithium producer, for use in a cathode factory in Chile. This year, additional lithium offtake from Albemarle Corp.’s mine in Chile is available for similar deals, drawing interest from Korean companies.
Unlike Chinese projects, lithium processed by Korean firms in Chile may qualify for US incentives to diversify clean-energy supply chains. Chile, having a free trade agreement with the US, is in talks with the US at a diplomatic level to assess the compliance of value-added products with incentives. Preliminary feedback suggests compliance. Cathode projects in Chile may also process lithium mined in Argentina.
Chile plans to open new production areas under a public-private model, and by the end of March, the government will call for formal expressions of interest to develop extraction projects in smaller salt flats. The bidding process will follow, with contracts awarded by the end of the year. The government has modified its approach, allowing the private sector to develop small salt flats independently, making contributions to the state. Enami, a state-owned company, could also take a minority stake in some projects, even if they are deemed strategic.