February 2018: Chile has been at the center of a debate during the last month. The reason: lithium.
After a long dispute over disagreements in lease contracts, CORFO and SQM sealed an agreement to continue with lithium exploitation in the Salar de Atacama and the applause was immediate.
Mr. Eduardo Bitrán is Vice President of CORFO and described the agreement as the “world’s best contract”. This agreement and the Albemarle agreement will contribute around US$12 billion in total to the Treasury. He added “This negotiation has generated the equivalent of all the mining companies in the country”.
Furthermore, Mr. Patricio de Solminihac is the CEO at SQM and believes that in the long term this will consolidate its leadership in the industry.
The non-metallic mining sector is required to amend its corporate governance structure, equalize its leases to those agreed in the Albemarle contract, provide capital for industry research and development, and retain 25% of lithium production to sell in Chile.
The country could achieve up to 40% of world production by 2025 and that would place it at the center of the table again. Chile has 54% of the world’s lithium reserves, according to the U.S. Geological Survey, and SQM production could reach 63,000tpa LiC and 13,500tpa LiO this year. This agreement has tripled the extraction quota for the non-metallic mining company, which will exceed 340,000t Li by 2030.
However, industry analysts have is sued warnings about various short and medium term risks. (Read more)