SANTIAGO, July 13 (Reuters) - Chile´s Molymet has dropped a project to build battery parts in Chile, the second of three companies to pass on the deal little more than a year after winning guaranteed access to cheap Chilean lithium from top producer Albemarle.
The Chilean molybdenum producer early in 2018 won a government auction to build a battery-parts factory in the South American nation´s northern desert. In exchange, Chilean development agency Corfo had promised Molymet a highly coveted, 27-year supply of discounted lithium.
In a regulatory filing late on Friday, Molymet said its board had voted to "completely terminate its participation and involvement" in the project.
Molymet did not say in the filings why it had chosen to drop its plans.
The Chilean miner´s announcement follows that of South Korean steelmaker Posco, which last month dropped a similar project, saying its plans called for a type of lithium not widely available in Chile.
Posco´s partner in that joint venture, Samsung SDI , the world's largest maker of smartphones, told Reuters that it is still reviewing the project following POSCO's announcement.
The third and final winner of the 2018 tender, China's Sichuan Fulin Transportation Group Co, did not immediately reply to requests for comment on the status of its project.
Molymet´s decision is yet another setback for Chile, which has struggled to modernize its mining policy and develop a domestic battery industry despite boasting the world´s largest supplies of ultralight battery metal lithium.
Following last year's tender, Chile's government said the three projects together would bring $754 million in investment to Chile, and promised at least 664 jobs would be created.
The government auction was widely seen as a foot in the door into Chile as countries and global corporations scramble to lock down supplies of key metals used in batteries that power cell phones, tablets and electric vehicles.
Top lithium miner Albemarle, which produces lithium from Chile´s Salar de Atacama, had in 2016 agreed to supply the winners of the tender with low-cost lithium. As part of that deal, regulators had agreed to allow the company to more than triple output. (Reporting by Dave Sherwood Editing by Chizu Nomiyama)