Albemarle balked at an amendment to its basic contract that would have seen up to 25% of its permitted 85,000 metric tonnes production subject to preferential price treatment as Corfo tried to stimulate domestic downstream industry.
"The spirit of the amendment with Corfo is in line with what we expected our commitment on preferential pricing and terms to be. The agreed-upon process will have no material impact on our anticipated earnings growth, margins or other financial results," said Albemarle president for lithium, Eric Norris.
The bulk of Albemarle's lithium production is in Chile's Salar de Atacama, a salt flat in the country´s northern desert that supplies about 40% of the world's lithium. Corfo, which leases mining rights in the salar, had previously threatened to cancel its contract with Albemarle over the dispute, which raised concerns of potential supply disruptions in a strong market.
A December 2016 contract amendment gave Albemarle rights to expand its Atacama operation to 85,000t lithium carbonate-equivalent by 2020. Albemarle expects to produce 40,000-45,000t LCE this year.
Albemarle is busy with its ‘Wave 1 expansion' that will push LCE output to 165,000t by 2021. The 20,000t/y Xinyu II project in China will produce lithium hydroxide from 2019, the 40,000t/y La Negra III/IV expansion in Chile will produce lithium carbonate from 2020 and Kemmerton I/II in Australia are said to be on track for 40,000t/y hydroxide by 2021.
Albemarle trades more than 32% lower in New York than a year ago as lithium prices corrected over most of the past 12 months, but ended Friday positive with a gain of 3.46% or US$2.56 to $76.58, capitalising it at $8.13 billion.