Chile opens lithium salt flats for investment, saves two for state control

By Thomson Reuters Mar 27, 2024 | 4:25 AM

SANTIAGO (Reuters) – Chile’s government on Tuesday opened up more than two dozen lithium salt flats to private investment, while reserving the prolific Atacama and Maricunga deposits for state majority control in lithium extraction.

The long-anticipated announcement sheds light on how President Gabriel Boric’s government plans to carry out a policy announced last year to boost state control over the South American country’s lithium industry, the world’s second-largest after Australia.

The opening to fresh projects could more than double Chile’s production of lithium, a key material for electric vehicle batteries, in a decade, said Finance Minister Mario Marcel.

“What we announced a year ago is starting to become a reality,” he told a press conference.

Officials said they would open a tender process in 26 salt flats in April, set to conclude in July, although not all would necessarily attract interest, officials said.

In another five salt flats, state-run companies are already beginning projects and seeking partners.

Only two companies currently extract lithium in Chile – Chile’s SQM and U.S.-based Albemarle – both in the Atacama salt flat.

The Atacama salt flat has the world’s highest concentration of lithium in brine, and the Maricunga salt flat also has some of the highest levels in Chile.

The government appointed state-run copper giant Codelco to negotiate joint ventures with each company. So far, the miner has inked a preliminary deal with SQM set to run through 2060.

Codelco this month also completed the $244 million acquisition of Australia’s Lithium Power International, which owns the Salar Blanco project alongside Codelco’s own holdings in Maricunga.

Officials on Tuesday said the government is also interested in participating in lithium projects outside Atacama and Maricunga, without a majority stake.

Some projects led by private companies will require approval by local indigenous communities, depending on the potential impact in each region, officials said.

Mining Minister Aurora Williams noted that officials are still evaluating the creation of a national lithium company, part of the plan outlined last year, without a deadline for next steps.

Environmental protection will be granted to 30% of the salt flats, in areas that have yet to be determined, officials said.

(Reporting by Alexander Villegas, Daina Beth Solomon and Natalia Ramos; Editing by Sarah Morland and Sonali Paul)