SANTIAGO (Reuters) – Chile's economic development agency Corvo said on Wednesday it had reached an agreement with… Albemarle (NYSE:) to establish an option for the US company to increase its production quota by 240,000 metric tons of lithium metal equivalent (LME).
This increase would raise Albermarle's production share by approximately 50%, from around 460,000 metric tons of LME currently.
To reach the higher quota, Albemarle will need to demonstrate its ability to use sustainable technology such as direct lithium extraction, consult with local indigenous communities, and obtain environmental permits, CORFO said.
The agreement is part of a settlement reached in April that calls for Albemarle to pay $15 million to resolve a complaint CORFO filed in 2021 with the International Chamber of Commerce (ICC), in which it argued the company underpaid commissions to the state.
Albemarle is one of two companies that produce lithium in Chile, the world's second-largest producer of the white metal used in electric car batteries.
“This establishes a series of provisions that allow us to expect production with higher sustainability standards in the Salar de Atacama,” Jose Miguel Benavente, vice president of CORFO, said in a statement, referring to the lithium-rich salt flat where Albemarle operates.
The agreement also sets new conditions for setting a “preferential price” for producers of lithium products in Chile. The changes are intended to help those companies “reach an agreement with Albemarle in a better way and with greater flexibility for long-term supplies of lithium carbonate,” CORFO said.
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Other terms of the 2016 agreement with Albemarle have not changed, including the validity of the deal until 2043 and the option to purchase assets in the Salar de Atacama, CORFO said.