Home » Chile Opens Doors to Private Investment in Lithium Exploration

Chile Opens Doors to Private Investment in Lithium Exploration

Chile unveils a new strategy to boost lithium production by opening 26 salt flats for private exploration

by Oluwatosin Alabi

Chile, a South American nation, has unveiled a strategic plan to boost lithium production by inviting private companies to explore and develop new resources. This move aims to solidify Chile’s position as a key player in the global lithium market, a mineral crucial for the production of electric vehicle batteries and other clean energy technologies.

A Balancing Act: State Control and Private Participation

President Gabriel Boric’s administration seeks to strike a balance between maintaining state control over the most promising lithium reserves and attracting private investment to accelerate production. The new policy prioritizes public-private partnerships, with state-owned mining companies like Codelco taking the lead in developing the most lucrative lithium deposits, while private firms can hold a majority stake in less strategic areas.

The government has identified 26 lithium-rich salt flats for potential exploration by private companies. A bidding process will commence in April 2024 and is expected to conclude by July. Officials anticipate three to four new lithium projects to be underway by 2026. This initiative signifies a significant shift, as currently, only two companies – SQM from Chile and Albemarle from the United States – extract lithium within the country, both operating in the Atacama salt flat.

Focus on Sustainability and Responsible Development

The plan acknowledges the environmental concerns surrounding lithium mining. The government will establish a network of protected salt flats, especially those situated within national parks and ecologically sensitive areas. This ensures responsible development and safeguards the natural environment. 

Chile boasts the world’s largest copper reserves and ranks second globally in lithium production, trailing only Australia. Both metals are considered vital commodities for the global transition from fossil fuels to renewable energies. Only two companies currently extract lithium in the country – Chile’s SQM and US-based Albemarle – both in the Atacama salt flat.

 The nation possesses a unique opportunity to capitalize on the surging demand for lithium, projected to quadruple by 2030 according to Chilean estimates.  Moreover, this growth is driven by the increasing adoption of electric vehicles and the wider clean energy transition.

The Road Ahead

While Chile opens its doors to private investment, negotiations with existing lithium producers continue. Codelco, the state-owned copper giant, has already secured a long-term agreement with SQM, while discussions with Albemarle are ongoing. Additionally, Codelco recently acquired Lithium Power International, an Australian firm, granting them access to the Maricunga lithium project.

Chile’s strategic plan positions the nation as a major supplier of lithium, a critical resource for the future of clean energy. By embracing private investment while prioritizing responsible development, Chile can ensure a sustainable and prosperous future in the global lithium market.

Source: Mining.com

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