The Chilean court stopped the lithium auction a few days after the quota was granted.

A Chilean court on Friday ordered a moratorium on lithium contract auctions held earlier this week as part of the South American country's plan to increase production of minerals used in car batteries.

The Court of Appeal ordered a moratorium at the request of the Governor of the Atacama region and the local indigenous community.

Most of Chile's lithium lies in salt water under the arid Atacama Desert that extends off the Chilean coast.

Chile on Wednesday granted a quota of about 80,000 tons of lithium to two companies: Chinese carmaker BYD Co., Ltd. and local company Servicios y Operaciones Mineras del Norte, with a total value of more than $120 million.

The court ordered a moratorium on the lithium auction, while claims not specified in the court decision were settled by the judiciary.

Chile's Ministry of Mines, which organizes the lithium auction, said on Friday that it was analyzing the decision. It added that the order "does not mean that the auction will eventually be cancelled. This only means that it will be suspended as the legal claim is settled. "

The auction, which allocated two of the five planned quotas, has been controversial among Chilean left-wing politicians, and lawmakers tried unsuccessfully to stop the auction.

Gabriel Boric, the left-wing president-elect who takes office in March, criticized the auction and said he wanted to set up a state-owned lithium company to mine the metal.

Chile, the world's largest copper producer, already owns a state-owned copper company, which is the world's largest producer of red metal.

Chile's lithium industry is dominated by two companies, Sociedad Quimica y Minera de Chile and Albemarle, both of which participated in the auction, but have so far failed.

Chile is the second largest lithium producer in the world and has the largest reserves in the world.