Major Setback as BYD and Tsingshan Pull Out of Lithium Projects in Chile

Chinese companies BYD and Tsingshan have withdrawn from multi-million dollar lithium cathode projects in Chile, citing plunging lithium prices. This marks a setback for Chile's economic development goals of enhancing domestic lithium processing. The projects were originally part of a preferential pricing agreement to encourage investment.

Chinese automaker BYD and metals group Tsingshan have withdrawn from multi-million dollar lithium cathode plant plans in Chile, according to a recent statement from the country's economic development agency, Corfo. The exit represents a significant setback in Chile's ambitions to boost domestic processing of lithium, a critical component for electric vehicle batteries.

The projects were abandoned due to falling lithium prices, which impacted investment decisions. BYD had delayed a $290 million plant intended to produce 50,000 metric tons annually of lithium iron phosphate (LFP) for cathodes. Tsingshan cancelled its $233 million project to produce 120,000 metric tons of LFP.

The exit of these major Chinese firms from Chile follows a failed 2018 initiative to secure lithium-related investments. New bidding is now open, offering a preferential purchase deal with U.S. firm Albemarle for lithium projects, hoping to revive interest under improved terms.

(With inputs from agencies.)