Chilean SQM's Argentina joint venture project to cost up to $600 mln

Thu May 5, 2016 8:25am EDT
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SANTIAGO May 5 (Reuters) - SQM , the Chilean chemicals group, said late Wednesday its joint venture with Canadian junior miner Lithium Americas to develop a lithium project in Argentina will require $500-$600 million in total expenditures.

SQM and Lithium Americas signed the joint venture in March for the Cauchari-Olaroz lithium project in Argentina's Jujuy province, eyeing annual output of 40,000 tonnes of lithium carbonate equivalent.

Construction on the project is slated to begin in the first half of 2017, while plant commissioning and production are scheduled to start by 2019, SQM said.

The company added that it "is committed to successfully developing the Minera Exar project in order to meet the world's lithium needs, complementing its existing lithium operations in Chile."

Chile's SQM, the world's biggest producer of key battery ingredient lithium, is on uneasy terms with the center-left government of Chile President Michelle Bachelet.

In the last two years, it has run afoul of authorities over market manipulation and dubious tax invoices, and is in arbitration with economic development agency Corfo over royalties.

SQM was privatized in the 1980s during General Augusto Pinochet's regime and a former son-in-law of the late dictator owns a controlling stake. (Reporting by Anthony Esposito; Editing by Jeffrey Benkoe)