Spotlight: Chile's lithium landscape

The regulations and economic structure to create Chile’s planned State-run lithium miner are expected to be ready by year-end.

The State will be the majority shareholder (51%) and the company will explore, mine and industrialize lithium, mining minister Marcela Hernando told the senate’s mining committee last week.

Hernando has previously said that state miners Enami and Codelco could have a significant stake in the lithium miner, while private companies may also participate to a lesser extent via tenders.

The government also wants to create a lithium research and development institute, to be staffed and equipped by an inter-ministerial working group, which includes the ministries of economy, energy, finance, and science and technology, said Hernando.

To spur national development, Chile, Argentina and Bolivia have agreed to create a regional lithium value chain. The three countries, plus Mexico and Peru, control over 67% of the world's lithium resources, with the largest proportion in Bolivia (21Mt), followed by Argentina (18.3Mt) and Chile (9.6Mt).

Chile and Argentina also signed a lithium agreement last week to create added value in the industry, address socio-environmental impacts and train professionals. 

CHILE'S LITHIUM LANDSCAPE

The world’s second-biggest lithium producer in 2020, Chile’s lithium compound output reached 124,600t, or 26.5% of global production, after Australia (48.8%) and followed by China (17.1%), according to the latest data from Chilean geological service Sernageomin.

Lithium is produced under concessions granted in the early 1980s, mostly to state companies. Development agency Corfo owns concessions that cover 55% of the Atacama salt flat, Codelco wholly owns the Pedernales salt flat and 18% of the Maricunga salt flat, while Enami has 4% of the Aguilar salt flat. 

Enami will request a special lithium contract (CEOL) from the mining ministry to increase production in Maricunga. CEOLs may also be signed with private companies. These are alternatives to concessions and involve a state company as the strategic partner.

US-based Albemarle and Chile’s SQM are the main lithium players with CEOLs in the Atacama salt flat.

Albemarle invested US$100mn last year to build a thermal evaporator at La Negra to almost double lithium processing capacity and increase production of battery-grade lithium carbonate to over 80,000t/y. 

Last year, Albemarle raised US$1.5bn in an equity offering to fund growth capital projects, focused on increasing its lithium and bromine capacity, according to its investors report from May.

“Albemarle pays 40% on the final sale price [of lithium] to Corfo and we have a U$300mn commitment until 2043, when our permission for research and development through Corfo will expire,” corporate affairs manager Marcelo Valdebenito told local media.

SQM produced 120,000t of lithium carbonate last year and is expected to reach output of 180,000t in 2022.

Canada’s Wealth Minerals also reported on Monday that it was starting drilling at the 8,000ha Ollagüe project in the Atacama salt flat. A 2018 drilling campaign with partner Lithium Chile suggested lithium grades of up to 480mg/l, with surface sampling returning grades of up to 1,140mg/l. 

Wealth Minerals also has 144 exploration concessions covering 46,200ha in the northern part of the Atacama salt flat.  

Lithium Chile, which is also owner of 14,800ha of the Laguna Blanca project, recently announced the acquisition of an additional 9,600ha, plus 2,500ha of new claims in the Aguas Caliente Norte salt flat. Sampling returned lithium grades of up to 369mg/l. 

Australia’s Talison Lithium, 51% owned by China’s Tianqi Lithium and Australia’s IGO and 49% owned by Albemarle, is also exploring the Atacama salt flat. Tianqi Lithium also holds a significant stake in SQM. 

Meanwhile, UK-based CleanTech Lithium has the Laguna Verde and Francisco basin projects. Drilling and brine assays results and lithium extraction test-work confirmed battery-grade lithium (99.9% lithium carbonate). The current resource estimate is 1.2Mt of lithium at a grade of 246mg/l.

Francisco basin drilling registered lithium grades of 375mg/l and 694mg/l. The company started a pilot plant to produce 10t of battery-grade lithium per month by 2024-25 to supply the EU’s electric vehicle market. 

The Maricunga salt flat, near Copiapó, has attracted Minera Salar Blanco, which has an agreement with Japan’s Mitsui and Australia’s Lithium Power International, seeking to produce an average 15,200t/y of lithium carbonate during a 20-year mine life. 

And Chile’s Simco is investing US$350mn in the area to produce 14,300t/y of lithium carbonate and 38,900t/y of potassium chloride as a by-product.

 

Source: Atlassons Business Services