Lithium call for bids: the story of a desert process
05-Dec-2012 Terra.cl – News
Call for bid was invalidated by Ministry of Mining in October
By mid November and as the Sub-secretary of Mining, Francisco Orrego, had anticipated, the lithium call for bids was definitely stated as an invalid process.
After the many setbacks the process experienced since its very beginning, including a round table where Pablo Wagner – former Mining Sub-secretary – and ex-President, Ricardo Lagos participated and where the latter made a call to all sectors to start an open discussion.
A few days ago it came to the public knowledge that including travel and paper work expenses aimed at executing the call for bids, the State spent CH$30 million. The new decree has stated that there is no call for bids process and bid bases were left ineffective pursuant to the decision of the Special Lithium Bid Committee.
On a different note, and although there was doubt about the interest of Codelco in entering the lithium business, the state-owned company has informed that they are looking for a partner for this operation. However, this is a decision that will be made next year.
Controversial bid
Notwithstanding the Lithium Operation Special Contracts process was started in June 2012, and even when Wagner searched interested parties in New York, only in September and after three offers were received, SQM was awarded the first bid by making the best economical offer amounting to CH$19,301 million (US$40.63 million).
However, one month later the Ministry of Mining invalidated the process stating that the company had failed to comply with the bid bases to explore and exploit lithium for 20 years in any point of the Chilean territory.
Later the Errázuriz Group, also a bidder, set a claim against SQM for committing perjury stating SQM had ongoing pending legal actions against the State of Chile. After this the Seventh Guarantee Court of Santiago accepted the claim and issued an order for the Public Ministry to investigate the failed lithium bid process.
However, this is not the only problem in the process because one of main doubts referred to the conflict of interest the Minister of Mining, Hernán de Solminihac, would have because his brother, Patricio de Solminihac, works in SQM.
For this very reason the Minister disqualified himself and left the process in charge of Wagner who resigned after the invalidation of the call for bids.
