Why lithium-rich Chile is wooing Japanese EV battery companies

Chile, home to the world’s largest lithium reserves, says Japanese battery and metals companies are among Asian investors interested in acquiring long-term preferential access to the ingredient, in exchange for adding value to the raw material and transferring skills.

A heavyweight in the mining world, Chile wants to woo companies that can help it develop processing and manufacturing capabilities.

In April, it granted Chinese EV maker BYD access to preferential prices for lithium carbonate produced by SQM, the world’s second-largest lithium producer, for use in a cathode factory to be built in the country’s north.

Additional lithium offtake – from Albemarle’s mine in Chile – will become available next year for similar deals. While SQM’s production contract expires in 2030, Albemarle’s runs through 2043, providing greater certainty to bidders for preferential prices and signalling a more competitive process, Chilean Economy Minister Nicolas Grau said.

“Battery producers want to be part of lithium extraction, and the only reason is to get certainty of supply,” Mr Grau said in an interview in Tokyo, where he’s leading a roadshow that will also take in South Korea, before heading to China with President Gabriel Boric.

“This is much simpler. They do not have to wait three years or five years to get lithium.”

Following meetings with Sumitomo, Mitsui and Sojitz, among others involved in the battery and EV supply chain, Mr Grau said Japanese companies were “quite interested” in investing.

Japan’s biggest battery producers and carmakers have been investing heavily in the development of next-generation batteries as they vie with Elon Musk’s Tesla and BYD – both front-runners in the global automotive industry’s shift towards zero-emission EVs.

Panasonic Holdings said it is making progress in creating Canada’s first lithium-ion battery supply chain for EVs made in North America. Japanese and Canadian officials met last week in Ottawa to sign a pact on EV supply chains.

A lithium mine on the Atacama salt flat in Chile. Battery producers want to be part of lithium extraction to ensure supply, said Economy Minister Nicolas Grau. Reuters

Asked about efforts to attract investment from both China and nations aligned with the US – which is seeking to diversify its clean-energy supply chain, and with whom Chile has a free-trade agreement – Mr Grau said the country saw its agnostic approach as an advantage.

Chile, the biggest copper-producing nation and number two lithium supplier, has sought to make the most of booming battery-material demand, but it has occasionally rattled markets.

A plan announced this year by the Boric government outlined proposals for the state to take a controlling stake in lithium operations considered strategically significant, with twin goals of boosting output and making extraction more sustainable.

Still, the government has said it will respect the existing contracts of SQM and Albemarle – the only two lithium miners in Chile – and will allow private firms to retain control of projects in non-strategic areas.

Bidding for exploration contracts is scheduled to take place next year once authorities identify new production areas.

With only seven years left on its contract, SQM has entered into talks with state-owned Codelco for a new arrangement under the public-private model.

Any deal would see Codelco take a majority equity stake, but ideally the two firms would form a joint venture in which they “participate in a similar way in the operation”, Mr Grau said. Both sides have an interest in reaching a deal to avoid a hiatus, he said.

The minister dismissed concerns that despite Chile’s cost advantages – lithium from brine deposits is more easily processed into lithium carbonate – other countries, including Australia, have made quicker progress in capitalising on rising demand.

“We need to attract the right people,” Mr Grau said. “In our view, it’s not a competition with other countries, but it’s about how to do this well, how to attract the right people so we can take advantage of the huge opportunity that we have.”

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The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
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Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
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ESSENTIALS

The flights

Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.

The hotels

Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.

The tours

A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.

Sinopharm vaccine explained

The Sinopharm vaccine was created using techniques that have been around for decades.

“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.

"What is left is a skeleton of the virus so it looks like a virus, but it is not live."

This is then injected into the body.

"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.

"You have to be exposed more than one time to what we call the antigen."

The vaccine should offer protection for at least months, but no one knows how long beyond that.

Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.

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Sunday Arsenal v Brighton (3pm), Everton v Burnley (5.15pm), Newcastle United v Liverpool (6.30pm)

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