Tesla sounds out lithium tie-up with Chilean miner Codelco: newspaper

SANTIAGO (Reuters) - U.S. electric vehicle maker Tesla Motors Inc has met with government authorities in Chile to discuss a lithium venture with state copper miner Codelco, a local newspaper reported on Thursday.

Lithium is a key ingredient of the electric car batteries used in Tesla's autos. The world's largest known deposits of the chemical straddle huge salt flats in Chile, Bolivia and Argentina.

"Top executives from the company visited Chile to meet with government authorities and suggest an agreement with Codelco," financial newspaper Pulso reported, without citing sources.

Codelco said in response that no agreement had been reached.

"A formal process for exploring for lithium has not started, nor has the board even taken a decision on that," the company said.

Codelco [COBRE.UL], the world No. 1 producer of copper, also has small operations in deposit offshoots like silver but no current interests in lithium. It has said previously that it would consider entering the lithium industry if there were a good business opportunity.

With copper prices at six-year lows, the prospect of diversification may look attractive. However, Codelco executives have also been skeptical, given the lithium industry's relatively small size.

Other companies, such as Chile-based Li3 Energy Inc, have also been reported as interested in looking for lithium partners in the South American country.

Shares of Chile's SQM , one of the world's biggest producers of lithium, rose in February 2014 when Tesla announced plans to build a large battery plant in the United States.

Tesla was not immediately available for comment.

(Reporting by Rosalba O'Brien and Fabian Cambero; Editing by Lisa Von Ahn)

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