Chile’s Value-Added Lithium Strategy Faces Setbacks Despite New Tender

Albemarle

Preferential pricing fails to attract long-term downstream lithium investments

Chile's value-added lithium strategy continues to struggle, as the country launches a new tender targeting downstream lithium manufacturing. Despite offering preferential prices through U.S.-based Albemarle’s supply, past efforts to anchor lithium battery production in Chile have faltered due to investor withdrawal and bureaucratic hurdles.

Chinese companies exit amid weak market and contract uncertainty

On 30 April, Chile’s economic development agency Corfo issued a call for proposals to manufacture lithium-based products locally. The offer involves 9,599 tonnes/year of lithium carbonate equivalent (LCE) from Albemarle’s operations in the Atacama region, with volumes set to rise annually until the lease ends in 2043. However, Chinese firms BYD and Yongqing Technology—winners of a 2022 tender—recently exited the program, citing weak global lithium prices and the short remaining duration of SQM’s contract, which ends in 2030.

Bureaucracy and pricing formula disputes hinder industrialization

Government delays in allocating fiscal land for facilities and unresolved pricing methodology disputes have consistently derailed investment plans. Chile also failed to advance a 2018 initiative when three selected companies abandoned their projects due to disagreements over the preferential pricing mechanism. These repeated breakdowns raise concerns about the long-term viability of Chile's value-added lithium strategy.

The Metalnomist Commentary

Chile’s ambitions to move up the lithium value chain face structural and market barriers. Without streamlining regulatory procedures and securing long-term offtake confidence, the strategy risks remaining stuck at the raw material stage—even as global EV demand grows.