June 3, 2023

By Yuka Obayashi

TOKYO (Reuters) – Japan’s trading house Toyota Tsusho Corp is concerned that countries like Chile may take more steps to limit exports of raw minerals such as lithium, its chief financial officer said on Thursday.

Chilean President Gabriel Boric said last week he would nationalize the country’s lithium industry, the world’s second-largest producer of the metal essential in batteries for electric vehicles, to boost the economy and protect the environment.

“Like what happened in Chile, there could be more instances of restrictions on commodity exports due to growing nationalism in emerging countries,” CFO Hideyuki Iwamoto told a press conference.

But the trading company, which supplies some materials to Japanese automaker Toyota Motor Corp., believes business risk can be reduced by locally processing raw minerals such as lithium before export, Iwamoto said.

Toyota Tsusho started production of lithium carbonate in 2014 with Australian miner Orocobre at a mine on the Olaroz salt flat in Argentina and decided to expand production capacity in 2018.

“We have difficulties in Argentina because of high inflation, but there are no similar (export restrictions) problems at the moment because it is an export industry,” Iwamoto said.

Lithium battery prices hit an all-time high of $85,000 a ton in December, but have since fallen nearly 50%. That price is still relatively high, about double the October 2021 price.

“Compared to last year, lithium prices have halved, but share prices of lithium-producing companies have not fallen, so we expect lithium prices to increase slightly from current levels in the medium to long term,” said Iwamoto.

($1 = 6.9234 Chinese Yuan Renminbi)

(Reporting by Yuka Obayashi; Editing by Susan Fenton)