SANTIAGO (Reuters) - Chile’s government has given the go-ahead for state development agency Corfo to proceed with a deal to resolve a dispute with miner SQM over lithium royalties, newspaper La Tercera reported on Saturday.
Government ministers who sit on Corfo’s board of directors indicated their support at a meeting Friday afternoon in which Corfo Vice President Eduardo Bitran said the two parties’ lawyers were drafting an agreement. The final round of talks before the conciliation period expires is expected on Jan. 17.
“We have unanimously decided to ask the executive vice president, Eduardo Bitran, to reach an understanding with the other party in front of the arbitrator next Wednesday,” Economy Minister Jorge Rodriguez Grossi said upon leaving the meeting in Corfo’s offices, according to La Tercera.
SQM and Corfo have been embroiled in a high-stakes arbitration since May 2014 over the Salar de Atacama, home to some of the world’s most productive deposits of lithium, which is used in the batteries that power electric vehicles. Chile accuses SQM of underpaying royalties and violating environmental regulations.
Last month, the two parties agreed to suspend their arbitration for 30 days in a push to settle their differences after SQM agreed to changes in its corporate governance.
Under the deal, Corfo would raise SQM’s production quota to 180,000 tonnes per year through 2030. That could boost revenues to state coffers from taxes and royalties from SQM’s lithium production by up to $7.5 billion by 2030.
If the two sides do not reach a deal, SQM would hit its total output limit in 2022.
The dispute between SQM and Corfo over the Salar de Atacama, which is responsible for half the company’s earnings, also has complicated Canadian Potash Corp of Saskatchewan’s bid to divest its stake in SQM as part of its proposed merger with Canadian rival Agrium Inc.
Reporting by Antonio de la Jara; Writing by Luc Cohen; Editing by Bill Trott