SQM Wins Chile’s Lithium Concession

The world’s top lithium producer, Chile’s SQM (NYSE:SQM), has won a tender to develop a 20-year lithium concession in Chile. Chile produces roughly 40 percent of lithium, a key material in the manufacture of hybrid vehicles and computer and smartphone batteries.

SQM outbid rival Posco Consortium—which includes South Korean steelmaker POSCO and lithium exploration and development company Li3 Energy (OTCBB:LIEG) —  for the contract with an offer of US$40.6 million dollars. The minimum bid to qualify for the tender was $5.3 million.

Once SQM’s lithium operation is operational, a royalty of 7 percent of total monthly gross sales will be paid to the State. With the new concession in operation, global lithium supply could be boosted by around 15 percent, stated Deputy Mining Minister Pablo Wagner.

Chile’s government has met with much opposition since the announcement of its decision to privatize the the country’s lithium.