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U.S. lithium firm Albemarle plans to more than double Chile output

Published 2016-02-02, 09:05 a/m
© Reuters. U.S. lithium firm Albemarle plans to more than double Chile output
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SANTIAGO, Feb 2 (Reuters) - U.S. lithium producer Albemarle
has signed a deal with Chile to significantly increase its
output of lithium at a time when interest in the mineral that
powers electric car batteries is heating up.
Albemarle Corp unit Rockwood will invest between
$400 million and $600 million in the next four years to increase
its production of battery-grade lithium carbonate from Chile to
70,000 tonnes from its current 24,000, the economy ministry said
in a statement late Monday.
The Chilean government wants to ensure the country will
benefit from its natural bonanza and said it will earn up to
$100 million annually in taxes and royalties as a result of the
Albemarle deal. The company also will support the research in
Chile of lithium applications and solar energy.
Salt flats in the remote north of Chile and neighboring
Bolivia hold some of the world's largest reserves of lithium, an
important ingredient in rechargeable batteries. Chile currently
is the second largest producer globally, after Australia.
"The (planned) increase will enable the company to meet the
accelerating demand for lithium," Albemarle said in a statement.
A scramble to secure lithium resources has been gathering
pace as prices for the mineral have steadily risen, bucking the
global commodities trend. Annual demand is forecast to more than
double by 2020 from 95,000 tonnes now.
In recent weeks, state copper firm Codelco COBRE.UL has
announced tender plans for two reserves and U.S. electric
vehicle maker Tesla TSLA.O was rumored to be in Chile meeting
with the government.
On Monday, Canada's Wealth Minerals WML.V said it was in
talks to buy Li3, a firm that owns lithium assets in Chile.
Chemicals firm Albemarle spent $6.2 billion to buy Rockwood
last year.

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