Spotlight: The advances in Chile's lithium strategy

Chile's national lithium strategy is progressing on various fronts.

The science, mining and environment ministries and development agency Corfo signed an agreement to create a technological and research institute focused on lithium and salt flats, while state miner Codelco sealed an agreement with SQM. 

Meanwhile, fellow state company Enami is seeking partners and the mining ministry has met with communities and launched a process to attract the interest of private companies. Corfo is also seeking specialized producers that add value to lithium extracted by Albemarle.

President Gabriel Boric is currently visiting Europe to meet with private players interested in Chilean lithium. He is accompanied by economy minister Nicolás Grau, Codelco chairman Máximo Pacheco and Karla Flores, who is the director of investment promotion agency InvestChile.

Chile, the world's second largest lithium producer after Australia, wants to build a sustainable industry with the State having a central role, but open to financial support and technological experience from the private sector.

BNamericas provides an overview of the latest developments.

Codelco-SQM agreement

Codelco will own 50%+1 shares of the joint venture to be formed with lithium producer SQM to work in the Salar de Atacama between 2025 and 2060, although SQM's current lease contract with Corfo, which expires in 2030, will be respected.

But before production can start, legal, regulatory, technical and environmental issues must be resolved, while an indigenous consultation will conclude early 2025, Pacheco told a recent meeting with foreign press in which BNamericas participated.

The JV will produce up to 300,000t/y of lithium carbonate equivalent (LCE) between 2025 and 2030 and up to 280,000-300,000t/y between 2031 and 2060. The increase from SQM's current production capacity of 180,000t/y “will come through technologies and the optimization of operations, without involving greater extraction of brine or use of continental water,” Pacheco said.

Between 2025 and 2030, the State will receive about 70% of the profits, and 85% from 2031, through payments to Corfo and Codelco and taxes.

To manage governance, Codelco created the Salares de Chile unit, under which Salar de Maricunga and Minera Tarar will operate. The latter will be in charge of the JV with SQM Salar, controlled by SQM until 2030 and from then by Codelco.

In the second period, the plan is to:

• reduce brine extraction by 50%, reaching 822l/s by 2030;
• eliminate the use of continental water;
• reduce evaporation in ponds and use desalination plants, salt crystallization and water condensation instead;
• prioritize renewable energies.

When asked by BNamericas whether the JV will consider any pricing mechanism to protect tax revenue from lower lithium price cycles, Pacheco said “we will use the [spot] market price.”

Maricunga

Codelco will receive SQM's assets in the Salar de Maricunga, which together with its own assets and the Blanco salt flat, acquired in the purchase of Australia's Lithium Power, promise a large-scale operation.

Minera Salar Blanco, led by Salar de Maricunga, will define a partner in 2025 to start production in 2030. Meanwhile, the mining ministry is carrying out indigenous consultations to expand Codelco's special lithium operation contract (Ceol) in the area.

When asked by BNamericas if Codelco was considering acquiring concessions held by third parties in Maricunga, or if it planned to establish a type of joint participation, Pacheco said, "the mining ministry must first determine if it will deliver Ceoles to them."

Another subsidiary will be created to analyze development of the Salar de Pedernales.

Mining ministry and private participation

After the consultation to receive expressions of interest in exploration or extraction at 26 salt flats ended on May 17, the mining ministry published a document with the main responses.

See the responses in the Documents box in the top-right corner.

Proposals may be submitted here through June 17.

Albemarle Lithium

Companies interested in adding value to lithium produced by Albemarle in the Salar de Atacama may submit offers to Corfo here.

The winners will have access to a preferential price through 2043, when Albemarle's contract with the State expires. An initial volume of 9,500t/y LCE is considered, which will increase annually.

Enami

Enami confirmed a high lithium concentration of 740mg/l, with a maximum of 984mg/l in the Salar Aguilar that makes up the Salares Altoandinos project. 

On June 7, it closed a call to receive interest from private parties in forming a public-private partnership or to finance the initiative.

The company will continue exploring Salar Aguilar, Salar La Isla and Salar Grande and is expecting a Ceol currently being processed by the mining ministry. Indigenous consultation is also underway.

It is also evaluating direct extraction technology proposals it received as part of a call in which 30 companies and consortiums from 12 countries participated.