BUSINESS

China’s BYD, Tsingshan Scrap Plans for Chile Lithium Plants as Price Collapses

Published: May. 9, 2025 4:03 a.m. GMT+8

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Brine pools at a Sociedad Quimica y Minera de Chile (SQM) lithium mine on the Atacama salt flat in the Atacama Desert, Chile

Plunging lithium prices have forced Chinese electric vehicle (EV) maker BYD Co. Ltd. and stainless steel producer Tsingshan Holding Group Co. Ltd. to cancel plans to build battery material plants in Chile, a setback for the Andean nation’s strategy to extract more value from its vast lithium reserves.

Chile’s state development agency, Corfo, announced termination of the projects on May 7, underscoring how volatile global lithium markets are reshaping investment decisions across the battery supply chain.

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BYD and Tsingshan canceled planned battery material plants in Chile due to falling lithium prices, impacting Chile's lithium strategy.
Lithium prices plunged from over 600,000 yuan/ton in 2022 to 65,300 yuan/ton in May 2024, prompting project withdrawals and mine closures.
Chile, with the world's largest lithium reserves, launched a new tender in April 2024, extending supply contracts to 2043 to attract new investment.

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Who’s Who

BYD Co. Ltd.: BYD Co. Ltd. is a Chinese electric vehicle maker that had planned to invest over $290 million in a lithium iron phosphate (LFP) plant in Chile in exchange for access to discounted lithium. The plant was scheduled to start operations by the end of 2025 but was delayed due to ongoing negotiations and project challenges. Ultimately, BYD canceled the project in January 2025 due to unviable market conditions and falling lithium prices.

Tsingshan Holding Group Co. Ltd.: Tsingshan Holding Group Co. Ltd., a stainless steel producer, planned to invest $233 million in a cathode material plant in Chile, securing access to discounted lithium carbonate until 2030. The plant was designed for an annual capacity of 120,000 tons of LFP cathode material. However, the deal was voided in April 2025 after Tsingshan failed to establish a required local project unit, leading to the project's cancellation.

Shanghai Metals Market: Shanghai Metals Market is a Chinese commodities information provider that tracks prices and market data for metals, including lithium. According to the article, it reported that as of May 8, domestic lithium in China was priced at 65,300 yuan per ton, reflecting a 13% drop since the start of the year and a 41.6% decline compared to a year earlier.

SQM (Sociedad Química y Minera de Chile): According to the article, SQM (Sociedad Química y Minera de Chile) is a Chilean mining company that supplies lithium carbonate. Under Chile’s lithium tender, companies that built battery component factories in the country were offered discounted lithium carbonate from SQM via supply contracts valid through 2030, aiming to add value to Chile’s lithium reserves by attracting global manufacturing investments.

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