SANTIAGO (Reuters) – Chile’s economic development agency CORFO said on Wednesday it had reached an agreement with Albemarle (NYSE:) to grant the US company an option to increase its production quota by 240,000 metric tons of lithium metal equivalent (LME).
The increase will increase Albermarle’s production quota by nearly 50% from the current 460,000 metric tons on the LME.
To access the higher quota, Albemarle will need to prove its ability to use sustainable technologies such as direct lithium extraction, consult with local indigenous communities and obtain environmental permits, CORFO said.
The agreement is part of an agreement reached in April requiring Albemarle to pay $15 million to settle a complaint filed by CORFO in 2021 with the International Chamber of Commerce (ICC) alleging the company underpaid commissions to the government.
Albemarle is one of two companies producing lithium in Chile, which is the world’s second-largest producer of the white metal used in electric vehicle batteries.
“This establishes a number of provisions that allow us to expect production with higher standards of sustainability in the Salar de Atacama,” CORFO Vice President José Miguel Benavente said in a statement, referring to the lithium-rich salt flat where Albemarle operates.
The pact also describes new conditions for establishing a “preferential price” for lithium producers in Chile. CORFO said the changes were aimed at helping those companies “reach better and more flexible agreements with Albemarle for long-term lithium carbonate supplies.”
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Other terms of the 2016 agreement with Albemarle remain unchanged, CORFO said, including the deal’s duration until 2043 and the option to purchase assets in the Salar de Atacama.