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SQM (NYSE:SQM), the world’s largest lithium producer, lost ground in stock market trading in New York and Santiago today, after the Chilean Mining Industry announced it was withdrawing the extraction licence SQM was recently awarded through public tender. Sociedad Quimica y Minera de Chile SA was down 1.61% to $61.05 on the NYSE. In Chile, …
SQM (NYSE:SQM), the world’s largest lithium producer, lost ground in stock market trading in New York and Santiago today, after the Chilean Mining Industry announced it was withdrawing the extraction licence SQM was recently awarded through public tender.
Sociedad Quimica y Minera de Chile SA was down 1.61% to $61.05 on the NYSE. In Chile, where the diversified chemical company and lithium miner is based, the shares fell 1.7% after plunging up to 4.6%, the most in a month according to Bloomberg.
Last week SQM offered to pay $40.6 million for the 20-year concession, beating two other rival bids, NX Uno de Peine – which is controlled by the Chilean Errazuriz family – and the Posco Consortium, made up of Posco Ltd., Mitsui & Co. (TYO:8031), Daewoo International Corp. (KRX:047050) and Minera Li Energy SpA, which is a unit of LI3 Energy Inc. (PINK:LIEG). But Minera Li Energy SpA contested the win on the basis that it failed to meet the tender rules, one of which states that the bidder must not have any pending lawsuits against the government.
“The tender process is declared invalid,” declared a brief from the Mining Ministry issued Monday night.
Chile is the largest producer of lithium, a strategic metal used in the manufacture of lithium-ion batteries used in electronic devices and electric vehicles. The public tender process for the extraction of 100,000 tonnes of lithium sidestepped a decades-old ban on allowing natural resource concessions into private hands. The contract is expected to yield up to $350 million in royalties for the Chilean government. The concession is reportedly the first of several more to come as Chile attempts to increase lithium production to compete with rivals Australia and Argentina.
There is no word yet on whether the tender process will be re-opened following the rejection of the winning bid by SQM.