US firm Albemarle's La Negra lithium refinery in Chile has been hit by a pipeline explosion, which the firm expects to have minimal impact on sales but which has prompted calls for an investigation from local politicians.
The incident impacted an acid pipe at the plant, according to documents seen by Argus, but any effect on supply is expected to be minimal, Albemarle said.
"The La Negra facility is currently operational following an incident last week. No-one was injured, and we do not expect sales to our customers to be impacted," an Albemarle spokesperson told Argus.
La Negra's production capacity was doubled in 2022 to exceed approximately 85,000 t/yr of battery-grade lithium carbonate. It is unclear if any of that will be impacted temporarily.
Lithium prices spiked today, as the accident followed the temporary closure of China's largest lithium mine in Jiangxi province. Prices for 99.5pc grade lithium carbonate in China rose to Yn76,500-78,500/t ex-works on Tuesday from Yn74,000-76,000/t ex-works on Monday, and Yn69,500-72,500/t ex-works on 7 August.
The most actively traded lithium carbonate contract, for November, on the Guangzhou Futures Exchange rose sharply to Yn82,520/t on Tuesday from Yn72,300/t on 7 August and Yn70,840/t on 29 July.
A Chilean lawmaker has called for urgent inspections at Albemarle's La Negra chemical plant, in the Antofagasta region, because the accident allegedly exposed workers to a potentially fatal hazard.
In an official communication to Chile's national geology and mining service and national labor directorate, chamber of deputies member Jaime Araya Guerrero cited "deficient safety conditions" and "poor maintenance" at the lithium producer's facility, including "the operation of a motor with its propeller exposed". He requested immediate regulatory intervention to assess and address the plant's safety standards.
If potential inspections or maintenance lead to a closure of the plant for any reason, it could impact a lithium market on the edge of a turnaround.
"How much a shutdown plays into the price turnaround narrative depends on how long production is down. An extended shutdown combined with additional Yichun lepidolite shutdowns [in Jiangxi province] could accelerate price recovery," Global Lithium Podcast host Joe Lowry said.
