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Santiago de Chile. –
The conflict between the Production Development Corporation (Corfo) and the Chinese electric vehicle manufacturer BYD over the installation of a lithium cathode plant in Chile has escalated. Corfo's executive vice-president, José Miguel Benavente, issued a warning to the Chinese company: if it does not comply with the conditions stipulated in the contract awarded in April 2023, it will lose its right to access a share of SQM's lithium production until 2030.
Benavente, during his participation in the VII InvestChile International Forum held at the Sheraton Hotel, stated: "If by 2025 the investment is not materialized, then BYD will be removed as a specialized producer and the third in the waiting list will enter". This statement made it clear that the rules of the award process were known to all participants, including BYD.
In addition, Benavente explained that the Executive has been supporting BYD in the search for a suitable land for its US$ 290 million plant. "More than five land alternatives have been offered, and the company has not yet responded to the last offer that meets all its conditions," he indicated.
Regarding the complications mentioned by BYD, such as the fall in the international price of lithium, Benavente pointed out that the preferential price clause establishes that lithium carbonate allocated to specialized producers is delivered at a value equivalent to 20% lower than the average.
Benavente also refuted BYD's points of interest, such as the ongoing negotiation between Codelco and SQM to jointly exploit the Salar de Atacama. According to Tamara Berríos, country manager of BYD Chile, this negotiation is crucial because it defines the extension of the operation of the contract that covers the status of specialized producer with preferential price. However, Benavente argued that "when they applied, they knew that the contract with SQM was valid until 2030".
In addition, Benavente clarified that once the specialized producer is awarded, Corfo authorizes the negotiation of the preferential price with SQM or Albemarle, using a different rule, as long as Corfo is not affected.
The controversy arises after BYD expresses concern about the economic evaluation of its cathode plant due to the drop in the price of lithium. "The lower international price of lithium has affected the economic evaluation and projection for our plant in Chile," commented Berríos.
For his part, Benavente stressed that the bidding rules were clear and that other participants, such as Tshingshan, continue to advance in their projects under the same conditions. "The rules are even for everyone," he concluded.
