Tesla in Talks With Chilean Company Over Lithium Investment
Tesla is reportedly in talks with Sociedad Química y Minera de Chile, Chile's largest lithium producer as a possible partner. With the electric automaker set to ramp up production of its Model 3, it is currently seeking more stocks of the metal which is a key component in the creation of rechargeable batteries.
The deal with SQM would likely result in the creation of a new facility that would help both companies in securing the supply of raw material used in lithium-ion batteries. This is according to the executive vice-president of the Chilean development agency Corfo, Eduardo Bitran.
"With an increasing supply of lithium, Chile is key for any company that wants to become global in electro-mobility," Bitran told the Financial Times. "Being close to Chile or having a strategic alliance in Chile becomes a strategic factor for a company like Tesla."
Get Our Latest News for FREE
With electric vehicles quickly becoming mainstream, competition for Chile's large lithium deposits will skyrocket as demand for the metal increases. By sealing the deal with SQM, Tesla not only guarantees a steady supply of raw materials for its batteries, it can also help the automaker lower its operating costs as the price of lithium continues to soar.
Chile currently holds 54 percent of the world's lithium reserves, around 14.3 million cubic tones. This has the potential the South American country's economy with a potential lithium mining industry projected to attract as much as $10 billion in investment and up to 10,000 new jobs for its citizens.
While the talks are currently in its early stages, Bitran is confident that Tesla's initiatives will start a chain reaction that will benefit not only the country's lithium industry but the manufacturing sector as well. With Chile having some of the world's most affordable solar power, he believes that Tesla could also move the manufacturing of battery cathodes in the South American nation.
