German chemical giant BASF SE has halted plans to invest in lithium mining in Chile due to a steep price decline.
BASF ended early discussions with Canadian firm Wealth Minerals Ltd., which is exploring projects in Chile, according to an email to Bloomberg.
The potential deal would have involved financing and purchase agreements if Wealth secured production contracts in Chile.
BASF was also exploring the construction of a lithium cathode plant for electric vehicle batteries in the region.
The cessation of negotiations with Wealth Minerals comes as BASF faces broader industry challenges.
Last week, BASF announced the cancellation of a $2.6 billion nickel-cobalt refinery project in Indonesia.
A slowdown in electric vehicle sales has pressured the prices of essential materials, pushing lithium to its lowest value in three years after a peak in late 2022.
To adapt, BASF is focusing on enhancing its raw material supply in Europe. A new battery recycling plant in Germany is set to begin operations later this year, aiming to support European manufacturing needs.
This decision impacts not just BASF and Wealth Minerals, but also broader efforts by European authorities to secure key metal supplies for battery production.
It highlights the volatility of the electric vehicle market and the supply chain challenges.
BASF Abandons Chile Lithium Plans Amid Price Drop
Wealth Minerals faces additional hurdles as Chile seeks to expand lithium extraction zones.
One of Wealth’s projects is in a strategically significant area, requiring a partnership with a state-owned entity.
Wealth’s CEO, Henk van Alphen, acknowledged the slow progress of Chile’s lithium strategy but noted ongoing developments.
Next week, Chilean authorities will detail new contracts for non-strategic salt flats, potentially opening more opportunities.
The changing lithium investment landscape highlights the interplay of market prices, corporate strategies, and government policies.
This context is crucial as the global transition to electric vehicles continues to reshape industries and economies worldwide.
The situation with BASF and Wealth Minerals exemplifies the complexities and rapid changes in the pursuit of sustainable energy solutions.
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