Chile, Japan boost ties involving lithium extraction, supply

Editor / June 18, 2024 | 10:49
Both countries have agreed to strengthen cooperation in the mining and supply of lithium, including deals for Japanese firms’ acquisition of long-term preferential access to the battery metal, in order to adding value to the raw material extracted in Chile.

Japanese Trade Minister Saito Ken and Chile Mining Minister Aurora Williams said the two countries will focus on ensuring stable supply of the battery metal and the use of mining methods that protect the environment.

“Balancing economic growth and decarbonization is a common challenge for the two countries, and Chile has key minerals to help us achieve this,” Saito said at the signing ceremony, according to local website Emol. 

Under agreement, both countries will engage in technical cooperation for environmentally friendly lithium development and increase collaboration through an annual public-private joint conference on the mining sector, bringing together Japanese companies operating in Chile and Chilean government officials.

The South American nation has also sought boosting cooperation with other Asian players, including South Korea. Seoul is said to have bought some lithium carbonate this year from Chile via state-controlled Korea Mine Rehabilitation and Mineral Resources Corp. (KOMIR).

Likewise, Korean companies processing lithium in Chile may be eligible for incentives from the US to diversify their clean energy supply chains. The nation, which has a free trade agreement with the US, has been in discussions with the Biden administration to determine if value-added products would meet the requirements for these incentives, and early indications suggest they would.

Albemarle (NYSE: ALB) and SQM (NYSE: SQM), the only lithium producers in Chile, have agreements mandating that a portion of their production is to be allocated at preferential prices to companies that keep investment in the country.

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