The development and growth of the lithium industry must be synonymous with sustainability

By Sonami 

This is a machine translation of the original press release issued in Spanish.

The president of the National Mining Society - Sonami - Jorge Riesco, on the verge of the mining ministry delivering the results of the RFI (Request For Information), pointed out that “to move towards a more efficient system and sustainable lithium exploitation, it is crucial to align the capabilities of the private sector with the expectations of the State, ensuring that any change towards the concessioning of lithium is supported by a clear and robust framework of regulation and appropriate technology.”

Based on a work prepared by the Sonami mining study center, Riesco addressed the doubts and questions generated by the RFI process, pointing out that “if someone who already has mining property is prioritized for the assignment of the CEOL (special lithium operation contract), could be to the detriment of a bidder that does not have mining property, but that does offer a better offer in technical terms, with more efficient and advanced extraction methods, based on the technical criteria that, it is expected, are defined by the authority.”

Likewise, he stated that the question arises of “how the maximum brine extraction capacities will be designated, especially in the (still hypothetical) case of multi-salt extraction, where more than one entity extracts lithium from the same salt flat.”

“The assigned extraction capacities must harmoniously coincide with the technical limits of the salt flat and the extraction capacities of the companies. It is necessary to establish a clear criterion to increase the authorized extraction of the salt flat in the event of escalation, based on the limits of the salt flat and the capacities of the private sector,” said the Sonami manager.

Riesco added that, in a multi-salt flat context, “the increase in the extraction capacity authorized to one company could affect the production of another. For example, if a capacity increase is authorized for only one company, the other could be disadvantaged due to the dilution of the lithium concentration, which could lead to one company harming or even eliminating another.

In that sense, the president of Sonami specified that dialogue is essential between the private sector and the authority to “decide extraction capacities.” “Not only that, but these extraction capacities are limited both by the technical limit of the salt flat, defined based on environmental criteria, and by the capabilities of the companies. Each project has a minimum concentration that makes it viable,” he said.

“Although these questions pose significant technical and legislative challenges, they should not be insurmountable obstacles or reasons to maintain a lithium exploitation regime that hinders the development of this industry,” Riesco pointed out.

As an example, the Sonami manager mentioned the case of oil and gas exploitation in Texas, where multiple concessionaires extract from the same well, usually using Joint Operating Agreements. “These agreements provide a contractual basis for the exploitation, development and production of oil and gas between various “co-concessionaires.”

The president of Sonami said that “it would be beneficial for the Chilean legislator to study this case due to the similarities, where various entities are involved in the extraction of the same well, or salt flat in the case of Chile.” “This is crucial, since the development and growth of this industry must be synonymous with sustainability, considering the preponderant role of lithium in global decarbonization efforts,” concluded Riesco.

The report by the Sonami Mining Studies Center can be read here.