The agreement ends a dispute between the parties that saw Corfo seek an interpretation by the International Chamber of Commerce of its contract with the Charlotte, United States-based company.

As a result, Corfo will not file a previously-disclosed arbitration claim, Albemarle said.

The dispute had centered on the level of the preferential pricing of its lithium, a key raw material for the production of batteries.

Under the terms of its contract, Albemarle can sell up to 25% of its lithium production at a preferential price to another company or companies willing to invest in the production of value-added lithium materials in Chile.

In December 2016, Albemarle and Corfo entered into an amendment to its original agreement that increased the company's authorized lithium quota to two million tonnes on a lithium carbonate equivalent (LCE) basis.

This gave Albemarle the right to produce over 80,000 tonnes annually of technical and battery grade lithium salts through at least 2043 at its expanding battery grade manufacturing facilities at La Negra, Chile.

In 2019, Albemarle will produce between 40,000 tonnes and 45,000 tonnes on an LCE basis in that facility, and the expansion of that site to the full 85,000 tonnes remains on track to begin commissioning in 2020.

"We are pleased to have jointly developed this process that meets the spirit of the amendment with Corfo and is in line with what we expected our commitment on preferential pricing and terms to be," said Eric Norris, president of Albemarle’s lithium business.

Fastmarkets assessed the battery-grade carbonate (min 99.5% Li2CO3) spot market price on a delivered duty-paid basis to Europe and the US at $13-15 per kg on Thursday January 17, unchanged from the previous week on thin trading activity.

View the latest battery-grade lithium prices as part of our free weekly service, Lithium Price Spotlight.