The Chilean government plans to delay its arbitration with Albemarle Corp., with the expectation that the company will make a new offer to fulfill the terms of a 2016 contract, Reuters reported Dec. 27, citing a source close to the negotiations.

The company had to provide up to 25% of its annual lithium production, at discounted rates, to battery metal producers in Chile under the contract.

In October, state development agency Corfo said Albermarle violated the contract by failing to make a "serious" offer to the companies, and it will refer the dispute to the International Chamber of Commerce in Paris.

The source said that the companies were recently negotiating, and Corfo anticipates Albemarle to soon make a more favorable offer. However, Albemarle did not immediately comment on the scenario.

Corfo said it awarded contracts worth US$754 million to several companies in March to produce battery components in Chile using discounted lithium from the country, and all the projects are pending resolution of the contract dispute with Albemarle.