August 6, 2019: Chilean molybdenum miner Molymet has pulled out of a battery parts factory project in Chile despite the deal giving it cheap access to lithium, news agency Reuters reported on July 13.
Molymet is the second firm to turn down the offer to build a battery parts factory in Chile’s northern desert in return for a 27-year supply of discounted lithium from producer Albermarle.
It did not say in its filings why it had decided to drop its plans, but the first firm to drop out, South Korean steelmaker Posco, said the lithium it needed was of a type not widely available in Chile.
Three firms were granted tenders in 2018 to build the factory, and now just one, China’s Sichuan Fulin Transportation Group, remains in the offing.
It has not commented on the status of its project.
Molybdenum is a silvery white metal with the third highest melting point after the elements tantalum and tungsten, and is a transition metal that easily forms compounds with other elements. It is used in many industrial and electrical products, including batteries.
Molymet’s decision is a setback for Chile, which has struggled to modernize its mining sector and develop a domestic battery industry despite having the world´s largest supplies of lithium.
Following last year’s tender, Chile’s government said the three projects would bring $754 million in investment to Chile, and promised at least 664 jobs would be created.
Top lithium miner Albemarle, which produces lithium from Chile’s Salar de Atacama, had in 2016 agreed to supply the winners of the tender with low-cost lithium. As part of that deal, regulators had agreed to allow the company to more than triple output.