A court in northern Chile accepted an appeal for protection and ordered a halt to a tender for new contracts for lithium production that this week awarded quotas to the Chinese firm BYD and a local company.
The Court of Appeals of the city of Copiapó, capital of the Atacama region, decided to accept an appeal filed earlier this week by the regional authority, which asked to stop the auction, arguing that it violated the powers of the local administration and the right to live in a pollution-free environment.
The Ministry of Mining reported on Wednesday the award of two of the five contracts offered, for 80,000 tons of salable metallic lithium each, to the Chinese firm BYD and the Chilean company Servicios y Operaciones Mineras del Norte, for more than 120 million dollars between both companies.
“Let it be considered that an appeal for protection has been filed,” said a court resolution, which established a term of ten working days to present a report with background information.
“Bearing in mind that the contested act is in full execution, it is agreed not to innovate, paralyzing the lithium bidding and award process, while this appeal is resolved,” he added.
In a note, the Ministry of Mining said that “we are analyzing the background and we will respond according to the tools and deadlines provided by law.”
“The order not to innovate does not mean the definitive cancellation of the tender in progress. It only implies that it is temporarily suspended while this appeal is resolved,” he added.
Last week, center-left opposition deputies had already tried unsuccessfully to paralyze the contest before the justice system, which considered that the appeal was out of time.
Chile, the world’s largest producer of copper, is also the second largest producer of lithium, behind Australia. It has the world’s largest reserves of the metal, with 9.2 million tons according to the US Geological Survey.
The local lithium industry is dominated by SQM and Albemarle, which have major projects in the Salar de Atacama, where companies use brine pools to extract lithium from beneath the salar. Both firms were also in the running for the tender but did not win contracts.
The tender, which was launched unexpectedly in October last year, has been criticized by President-elect Gabriel Boric, who will take office in March and has spoken out in favor of a national lithium company.