Chinese giants BYD and Tsingshan pull out of lithium projects in Chile

Two major Chinese firms, BYD and Tsingshan, have abandoned plans to build lithium cathode plants in Chile, a significant blow to the South American nation’s ambitions to boost domestic lithium processing. Chile, the world’s second-largest lithium producer, had hoped these projects would add value to its natural resources.

According to company and government sources, Tsingshan has officially withdrawn from its proposed $233 million investment to produce 120,000 metric tons of lithium iron phosphate (LFP). Meanwhile, the Chilean national assets ministry confirmed that BYD, the world’s largest electric vehicle manufacturer, filed its withdrawal notice back in January.

BYD had earlier flagged delays to its $290 million LFP plant, which was slated to yield 50,000 metric tons annually. The company declined to comment on the cancellation.

Both projects were part of a government initiative offering preferential lithium pricing to investors willing to develop value-added lithium products in Chile. The decision to back out, however, stems from a sharp decline in global lithium prices, which has eroded the appeal of the agreements, according to a person familiar with the matter.

The news was initially reported by Chilean business outlet Diario Financiero.