Photo by: Lithium Chile
VANCOUVER (miningweekly.com) – In the days following conservative billionaire Sebastian Pinera being sworn in as president of Chile for a second term on Sunday, the new government is signalling a more relaxed approach to the hot-button issue of lithium production and exports.
This week's announcement that the Chilean Nuclear Commission (CCHEN) has allowed joint venture (JV) company Minera Salar Blanco (MSB) to extract, produce and market lithium products from the Maricunga salar is signalling a step-change in policy from socialist former President Michelle Bachelet.
"This is an inflection point in Chile, lithium production and more importantly how the outside world will now look at Chile. I don't think it's coincidental that the consortium of junior miners, two who are foreign owned, were granted the first nongovernment-owned exploitation/export licence in 30-plus years, 48 hours after then new Pinera government assumed the reins," Lithium Chile president and CEO Steven Cochrane told Mining Weekly Online on Thursday.
He pointed out that one of Pinera's election platforms was to return Chile to its mining heritage and encourage more foreign investment. "He's sending the right signal right from the start.
"Until now, the value of Chilean lithium projects has been greatly depressed compared to the $4 000-plus-per-hectare projects in Argentina. Similarly, investment in Chilean projects has been modest - due to licence concerns regarding the export of lithium from Chile. With this new extraction and export licence, the Chilean government is signalling the end of those obstacles," Conchrane stated.
The MSB JV has been granted an extraction quota of 88 885 t of metallic lithium (about 473 135 t of lithium carbonate) contained in brine over a 30-year period, the Vancouver-based company announced in a press release on Wednesday. The MSB is owned by Bearing Lithium (17.7%), Minera Salar Blanco SpA (32.3%) and LPI (50%).
The JV has four years from the date of authorisation to get an environmental impact assessment approved and present proof thereof to the CCHEN. The JV expects to submit its environmental impact application early in the second quarter.
Cochrane pointed out that the previous restrictions on Chilean lithium exploitation and export has, until now, hindered wide-scale investment by the mining industry. This has allowed Lithium Chile to amass the largest landholding of lithium exploration properties outside of the Chilean government, and the two current producers SQM and Albermarle. Its portfolio comprises 140 100 ha covering sections of 13 salars and 1 laguna complex in Chile.
The portfolio includes projects with lithium brine assays from near-surface sampling, measuring as high as 1 410 mg/ℓ lithium. "With this new government support for lithium mining, the company expects that companies with substantial, prospective projects will see considerable benefits," Cochrane said.
Chile is considered part of the 'Lithium Triangle' - the world's most prolific lithium producing region locked between Chile, Argentina and Bolivia, with Chile being the world's largest and lowest-cost producer of the energy metal.
Pinera's policies are seen as pro-mining, and are expected to support the copper industry at a time when it is dealing with falling productivity because of ageing mines.
The Pinera government is expected to create an agency that actively supports large-scale and greenfield mining projects. He has pledged support and stable funding for Chile's State-run miner Codelco, and has promised to slash red tape that has ensnared projects under his predecessor.
Pinera's first administration was marked by a vibrant economy, supported by thriving copper prices. Pinera has also promised to make Chile the first country in Latin America to achieve 'developed nation' status as defined by the Paris-based Organisation for Economic Cooperation and Development.