Chinese Giants BYD and Tsingshan Withdraw Plans for Chilean Lithium Projects

In a significant shift, Chinese automotive leader BYD and metals conglomerate Tsingshan have decided to abandon their multi-million dollar initiatives to construct lithium cathode plants in Chile. This development marks a setback for Chile's ambitions to expand its domestic processing capabilities of lithium, a crucial component for electric vehicle batteries.

The decision to withdraw comes as Tsingshan halts its $233 million project aimed at producing 120,000 metric tons of lithium iron phosphate annually. Additionally, BYD has indicated its intention to withdraw from a previously announced $290 million plant, which was expected to yield 50,000 metric tons of lithium iron phosphate each year. The Chilean government had granted these companies preferential prices for lithium in hopes of encouraging investments in the local lithium market.

Sources familiar with the situation attribute the withdrawals to the declining global prices of lithium, which have diminished the financial appeal of these projects. The earlier reports of these developments were published by the Chilean newspaper Diario Financiero, highlighting the economic challenges in the sector.

(With inputs from agencies.)