Chile court halts lithium auction days after quotas awarded

By Natalia A. Ramos Miranda

SANTIAGO, Jan 14 (Reuters) - A Chilean court on Friday ordered the suspension of a lithium contracts auction that took place earlier this week, part of a plan by the South American country to boost production of the coveted mineral used in car batteries.

An appeals court ordered the suspension, which was requested by the regional governor of the Atacama region and local indigenous communities.

Much of Chile's lithium is located in brines under the arid Atacama desert that stretches along Chile's coast.

Chile on Wednesday awarded lithium quotas of about 80,000 tonnes of lithium to two companies: Chinese automaker ByD Co Ltd 002594.SZ and the local firm Servicios y Operaciones Mineras del Norte for a combined total of over $120 million.

The court ordered the suspension of the lithium auction while the claims, which were not detailed in the court decisions, are resolved by the judiciary.

Chile's mining ministry, which organized the lithium auction, said on Friday that it was analyzing the decision. It added that the order "does not mean the final cancellation of the auction. It just implies that it is temporarily suspended as the legal claim is resolved."

The auction, which allocated two quotas of a planned total of five, has been controversial among Chile's left-wing politicians, with lawmakers trying unsuccessfully to block the auction.

Left-wing President-elect Gabriel Boric, who will take office in March, has criticized the auction and said he wants to create a state lithium company to exploit the metal.

Chile, the world's top copper producer, already has a state-owned copper corporation that is the world's largest producer of the red metal.

Chile's lithium sector is dominated by two firms, Sociedad Quimica y Minera de Chile SQMa.SN and Albemarle ALB.N , both of which participated in the auction but have so far been unsuccessful.

Chile is the world's No. 2 lithium producer and has the largest reserves in the world.
Reporting by Natalia A. Ramos Miranda; editing by Jonathan Oatis

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