Chile court freezes multi-million dollar lithium deal

 

Chile - Lithium deal



A Chilean court on Friday suspended a million-dollar state lithium tender deal. The tender was issued two days earlier. The tender process had generated controversy in recent months.

The tender process, which opened last October, will close this month. The tender deal caused controversy just two months before centre-right president Sebastian Pinera was replaced by leftist Gabriel Boric.

The court in Copiapo in the north of Chile said, “It is agreed not to innovate the tender.” The court agreed to award the process for the lithium. The minerals ministry said on Wednesday that China's BYD Chile SpA and Chile's Servicios y Operaciones Mineras del Norte S.A. were awarded the right to extract 80,000 tons of lithium each over 20 years.

Leftist president-elect Gabriel Boric’s team

Leftist president-elect Gabriel Boric's team had asked the government to postpone the tenders. The team reportedly said to set up a "roundtable" to discuss various conditions to apply to the contracts.

Boric rose to prominence during anti-government protests. The protests in 2019 showed the economic inequality of the country. It also triggered an official redraft of the constitution.

Chile court

The court accepted an appeal for protection filed by the governor of Copiapo and Miguel Vargas. The governors appealed to the court along with a group of Aymara and Diaguita Indigenous communities to stop the tender process.

According to the mining ministry, the tender process sought to restore Chile's position in the world lithium market. The government said that the sale was needed to return Chile to the position of the world's largest lithium producer. Chile was the world's largest lithium producer until 2016.

Earlier, opposition lawmakers demanded to stop the bidding process for a 20-year contract to extract 400,000 tons of lithium. Earlier, in Santiago, marchers chanted, "Pinera, understand that lithium is not for sale." Chileans protested against the government plan to sell a lithium extraction contract.

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