Lithium Contract in Chile Shortlisted to 3 Bids

A competition to win a lucrative lithium mining contract in Chile has been distilled down to three bids.

Lithium Investing News has learned that a cluster of companies, dominated by Asian firms, remains from an initial 66 companies that submitted bids to Chile’s Mining Ministry.

The competition is now down to the Posco Consortium, made up of  South Korean industrial giants Posco and Daewoo International Corporation, Japanese firm Mitsui & Co and Santiago-based Li3 Energy; and two Chilean mining companies, NX UNO de Peine and Sociedad Quimica y Minera de Chile (SQM).

The winner will earn the right to extract up to 100,000 tons of lithium over 20 years. The increased production could increase the supply of lithium, used to manufacture lithium batteries found in electronic devices and electric vehicles, by an estimated 15 percent, Deputy Mining Minister Pablo Wagner said on Friday. The winning bid, expected to be announced on Sept. 24, must be above $5.3 million.

Chilean media said that Li3 Energy and Posco are both investing about $250 million into the purchase of part of the Salar de Maricunga in northern Chile and are ready to begin extracting lithium from the area. The NX UNO de Peine alliance, controlled by Grupo Errazuriz, also includes companies Minera Copiapo and Samsung, and they have spent about $200 million in the Salar  de Atacama where they are currently producing potassium and are waiting to add lithium to their mining portfolio, reported DF.cl.

Chile produces just under half, or 43 percent, of the world’s lithium. Its vast Salar de Atacama lithium deposits are currently mined by only two companies, SQM (NYSE:SQM), a Chilean company, and Rockwood Holdings, (NYSE:ROC), a large US chemical company, both of which produce lithium carbonate, lithium hydroxide, and lithium chloride for export.

The company that wins the bid will also have to build a chemical plant within five years or risk having their production quota removed and losing the tender.