Chile-based lithium producer SQM has reached an agreement in a long running dispute with government development agency Corfo that will allow the company to increase its lithium carbonate production.
SQM had initiated a conciliation process with Corfo in December to end a dispute over corporate governance and royalty payments related to contracts signed in 1993.
In return for a payment of $17.5mn to Corfo, the companies will have an agreement to sell up to 25pc of lithium production at a preferential price to domestic value-added consumers. Following the implementation of various conditions regarding the management of the company, SQM will be able to process and sell up to 1.8mn t of additional lithium carbonate until 2030.
The total volumes would be close to 2.2mn t of lithium carbonate, including remaining volumes of around 340,000t (64,816t of lithium metallic equivalent) from the original allocated amounts.
The agreement stipulates an increase in lease payments for the Salar de Atacama site, which would be met by increasing the lease payment rate on fob export sales up to 40pc from the rate of 6.8pc on sales above $10,000/t of lithium carbonate.
This will likely increase export prices as the company considered that $12,600t as the average lithium carbonate price over the third quarter of 2017.
This news follows proposals by SQM last year to expand its lithium carbonate production by the second half of 2018 to meet growing demand, principally from battery manufacturers for use in electric vehicles.
