The Chilean government has pushed ahead with a contract to extract more of the world's largest lithium reserves, drawing harsh criticism from President-elect Gabriel Boric and other opposition groups who are trying to stop the bidding process.
The Ministry of Mines and Energy said in a statement that it had awarded two of the five contracts-one to Chinese electric car maker BYD Co., and the other to local company Servicios y Operaciones Mineras del Norte.
The outgoing government of centre-right President Sebastian Pinera (Sebastian Pinera) is seeking to reverse the country's declining share of the global lithium market as suppliers struggle to meet demand for electric cars during the boom, causing prices to soar.
But the timing has drawn criticism from Chilean opposition groups. Boric told reporters on Wednesday that while this government has the power to award contracts, its decisions are similar to "laws that bind you at the last minute at the end of the government."
Lawmakers accused the authorities of bypassing proper community consultation and completing the process before the change of government on March 11. After the winners were announced on Wednesday, some MPs rushed out of the special lithium meeting and vowed to submit their cases to the office of the comptroller.
Catalina Perez, representative of Boric's Apruebo Dignidad Alliance, told reporters: "We will not allow the government to carry out armed robbery against resources that belong to everyone."
Boric also wants to ensure that the state is involved in the production of lithium. Some of his advisers met with the government to make recommendations on how to improve the process.
Juan Carlos Jobet, the minister of mining and energy, said on Wednesday that these requirements had been adopted, that some of the resources in the contract had been earmarked for the community and would set up a negotiating table for a long-term lithium mining policy.
The award of the contract coincided with Chile's reassessment of its position on natural resources in the process of drafting a new constitution. Although pumping salt water from under Chilean salt fields and evaporating it is cleaner than hard rock mining in Australia, there is growing concern about the impact on fragile desert ecosystems.
BYD offered $61 million and, Servicios y Operaciones offered $60 million to secure a quota of 80, 000 tonnes of lithium over 20 years. These contracts together account for 1.8 per cent of Chile's known lithium reserves. The winner is still required to carry out exploration work and obtain all regular permits prior to the development of the project.
Soc. Quimica y Minera de Chile SA and Albemarle Corp. It is currently the only two producers in Chile. Last year, Chile produced about 18000 metric tons of lithium.
SQM and Albemarle as well as Cosayach Caliche SA have made bids, which the authorities say are well below the winning price.
