Chile’s National Lithium Strategy has suffered a major blow as Chinese companies BYD and Tsingshan have officially withdrawn from their planned industrial projects in northern Chile. This development undermines the governmentās ambitions to boost domestic lithium processing and battery manufacturing.
Both firms had been selected by Corfo, Chileās economic development agency, to build facilities for producing lithium cathodes and batteries. The agreements granted them preferential pricing and secured access to lithium carbonate produced by SQM through 2033. However, neither plant was ever built, despite being scheduled to begin operations by May 2025.
Market Shifts and Bureaucratic Challenges
According to reports by Diario Financiero, several factors contributed to the companiesā decisions. The global decline in lithium prices, along with shifting market conditions and bureaucratic delays, played a key role.
Last year, BYD had already signaled its frustration with the slow pace of progress. “The project is, in a way, on hold,” stated Stella Li, Executive Vice President of BYD and CEO of BYD Americas. She added that while the company received some communications from Corfo and the Chilean government, they were āunclear and not direct about the project’s future.ā
Corfo confirmed that BYD submitted a formal withdrawal request on January 14, 2025, citing difficulties stemming from the current global lithium market.
Tsingshan Also Exits
Tsingshan, which had planned to invest $233 million USD in a battery plant in Mejillones, also decided to abandon its plans. āThe plants wonāt materialize unless lithium investment barriers are lifted,ā a company executive told DF.