December 28, 2017 / 12:27 AM / a year ago

Chile could see $7.5 billion in royalties from SQM by 2030 -Corfo

SANTIAGO, Dec 27 (Reuters) - Chile could earn up to $7.5 billion in royalties by 2030 from a new contract with lithium miner SQM if it can resolve its dispute with the company, authorities said on Wednesday.

SQM and Chilean development agency Corfo have been embroiled in a high stakes legal battle over mining royalties in the Salar de Atacama, one of the world´s richest deposits of lithium, since 2014. Earlier this month the two parties agreed to suspend their arbitration for 30 days in a new push to settle their differences.

“We’ve done some calculations of what this [a potential deal with SQM] represents in terms of fiscal resources and revenue for the state and it´s very significant,” Eduardo Bitran, head of Corfo, told reporters following an event in Santiago.

Revenues to state coffers from taxes and royalties that result from SQM´s lithium production could total between $4.7 billion and $7.55 billion by 2030, depending on demand, Bitran said.

Bitran said his calculations were based on projected values of lithium, an essential ingredient for batteries used in electric vehicles. Experts say spot prices of the so-called “white gold” have more than doubled to around $25,000 per tonne this year from below $10,000 in 2015.

Bitran added that he hoped Corfo and SQM would reach an agreement by January 17, the last day of the conciliation period. Any deal would be then be subject to review and approval by Chilean authorities the following week.

The ongoing dispute between SQM and Corfo has also 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 Felipe Iturrieta; Writing by Dave Sherwood; editing by Diane Craft)

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