How the European Union tries to seduce Chile for more lithium
Negotiations underway between Chile and the European Union on lithium: Chile is the world's largest producer of lithium essential for producing accumulators
The EU wants to become one of the key regions globally for the production of batteries. The aim is to supply the European automotive industry which is currently surpassed in production and technology by the Chinese one. But to do this it needs a fundamental component to produce accumulators, namely lithium.
At the moment, the largest world producer is Chile. The EU, according to Politico.eu , is ready to sign a commercial pact within the first half of next year, but unfortunately "a squabble has broken out over the enormous lithium stocks of the salt pans of Atacama ".
THE AMBITIONS OF CHILE ON LITHIUM
What exactly happened? “Chile has its strategic ambitions as the holder of the world's largest lithium reserves and does not want to be just a supplier of raw materials to international industries that seize the added value of the battery business. Santiago is pushing to build its production ecosystem around lithium mining, in part by selling it at preferential prices to companies based in Chile. This is opening a rift with the EU, which insists that trading partners do not discriminate between buyers. local and foreigners ”, stresses Politico.eu who interviewed the Chilean Deputy Minister for International Economic Relations Rodrigo Yáñez on the subject.
THE EU POSITION ON LITHIUM
In its new commodity strategy launched in September, the European Commission added lithium to the list of key commodities for which there is a risk of supply disruption.
According to forecasts, by 2030 the EU could need up to 18 times more lithium than it is currently (60 times by 2050) to guarantee the supplies needed to build batteries for electric vehicles and for energy storage. . "If not addressed, this increase in demand could lead to supply problems," the EU underlines in the document.
THE DRAFT AGREEMENT. PARTS STILL DISTANT
At the diplomatic level, the talks between the parties are proceeding well: in fact, a trade agreement signed 18 years ago would be updated. But at the moment, notes Politico.eu , the parties would still be distant on some aspects.
Indeed, the draft trade agreement drawn up by Brussels provides that trading partners are prohibited from selling energy and raw materials at a lower price on the domestic market. Chile and the EU "will not impose a higher price for exports of energy goods or raw materials to the other party than the price charged for these goods when they are destined for the internal market", reads the draft of the chapter on energy and EU raw materials.
CHILE APPEALS TO FOREIGN INVESTORS
But Chile makes no secret of its intention to attract foreign investors to the country by offering lithium at preferential prices, instead of simply extracting the material and exporting it to the rest of the world.
Last year, the Chilean investment agency Corfo launched an appeal for foreign investors interested in turning Salar de Atacama lithium into value-added products such as batteries. To make the offer more attractive, Corfo guaranteed "a preferential price calculated on the lowest prices of 20 per cent of lithium products exported in the last six months".
THE HOPE IS TO CONCLUDE THE NEGOTIATIONS BY APRIL 2021
Negotiators from Brussels and Santiago will meet again next month for another round of talks. Santiago hopes to conclude the last round of negotiations by April 2021 and to close the deal by the first half of next year, ahead of the November 2021 elections and the adoption of a new constitution.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/come-lunione-europea-cerca-di-sedurre-il-cile-per-avere-piu-litio/ on Sat, 12 Dec 2020 17:43:06 +0000.