Toyota Tsusho fears other countries may follow Chile and curb raw minerals exports

By Yuka Obayashi

TOKYO (Reuters) - Japanese trading house Toyota Tsusho Corp is concerned that there may be more moves by countries like Chile to restrict exports of raw minerals such as lithium, its chief financial officer said on Thursday.

Chile's 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 electric vehicle batteries, to boost its economy and protect its environment.

"Like what happened in Chile, there could be more cases of restrictions on export of raw materials due to growing nationalism in emerging countries," CFO Hideyuki Iwamoto told a news conference.

But the trading company, which supplies some materials to Japan's top automaker Toyota Motor Corp, believes that its business risk could be reduced by processing raw minerals such as lithium locally before exporting, Iwamoto said.

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

"We face difficulties in Argentina due to high inflation, but there is no similar (export curb) problems at the moment as it is an export industry," Iwamoto said.

Battery grade lithium prices touched record levels of $85,000 a tonne in December, but have slumped by nearly 50% since then. That price is still relatively high, around double the price in October 2021.

"Compared to the previous year, the lithium prices have halved, but the stock prices of lithium-producing companies have not fallen, so we expect the lithium prices to rise slightly from the current level in the medium to long term," Iwamoto said.

($1 = 6.9234 Chinese yuan renminbi)

(Reporting by Yuka Obayashi; Editing by Susan Fenton)