News: RIO UPDATE 1-Albemarle aims to use new lithium tech in Chile as govt broadens control

(New throughout, adds details from conference call and background, updates stock price)

Albemarle Corp ALB.N plans to deploy new lithium filtration technologies in Chile as the government moves to broader control over its vast lithium sector and expand production of the metal used to make electric vehicle (EV) batteries, Chief Executive Kent Masters said on Thursday.

While lithium for years has typically been produced using open-pit mines or evaporation ponds, Chilean President Gabriel Boric last month said his country will begin to phase in direct lithium extraction (DLE) technology in coming years as part of a broad nationalization plan.

Chile has the world's largest lithium reserves, and Albemarle is the world's largest lithium producer with a contract to operate in the country through 2043.

While Albemarle hopes it can continue to operate in Chile after that, Masters and other executives acknowledged on Thursday in their first public reaction to Boric's plan that Albemarle's presence in the country after 2043 is likely only possible with wider use of DLE.

Masters said that while Albemarle had been discussing DLE with the government, "we were surprised by the announcement that came of out Chile." He added that the government has repeatedly stressed Albemarle's contracts will be honored through 2043.

Boric's plan "if enacted, may offer opportunities to expand our operations using new technology," said Masters.

Many DLE technologies use lots of potable water and electricity. None have yet to work independently at commercial scale. Chile and Albemarle could cement their dominant role in the global lithium and EV industries if they can get one or more DLE technology to succeed.

General Motors Co GM.N , Stellantis NV STLAM.MI , Standard Lithium Ltd SLI.V , Rio Tinto Ltd (RIO) and others have made their own DLE bets.

"Additional concessions (for lithium in Chile) will probably require us to use new technology and probably partner with the government as well," Masters said. "We're working to progress that as quickly as we can, and we'll do it in an number of places."

Shares of the Charlotte, North Carolina-based Albemarle rose 4% to $179.94 in morning trading. Masters and other executives repeatedly downplayed concerns about

weakening spot lithium prices

in China.

"Lithium demand and the EV market continue to grow at an extraordinary rate," Masters said.