Chilean Government Lists Lithium Flats for Private Investment

Chile's government has taken a significant step by opening up more than two dozen lithium salt flats to private investment, while maintaining state control over the prolific Atacama and Maricunga deposits for lithium extraction. This decision, anticipated for a long time, provides insights into President Gabriel Boric's strategy to enhance state control over Chile's lithium industry, which ranks as the world's second-largest after Australia.

The opening of new projects has the potential to significantly increase Chile's lithium production, a critical material for electric vehicle batteries, over the next decade, according to Finance Minister Mario Marcel. The government plans to initiate a tender process for 26 salt flats in April, with a conclusion expected by July. Additionally, state-run companies are already initiating projects and seeking partners for five salt flats.

Currently, only two companies, Chile's SQM and U.S.-based Albemarle, extract lithium in Chile, primarily from the Atacama salt flat, known for having the world's highest concentration of lithium in brine. The Maricunga salt flat also boasts significant lithium reserves.

To oversee negotiations with existing companies, the government has appointed state-run copper giant Codelco. Codelco has already reached a preliminary agreement with SQM, with plans extending until 2060. Additionally, Codelco recently completed the acquisition of Australia's Lithium Power International, which holds the Salar Blanco project alongside Codelco's own assets in Maricunga.

The government is also interested in participating in lithium projects outside of Atacama and Maricunga, although without seeking a majority stake. Projects led by private companies will require approval from local indigenous communities, depending on their potential impact in each region.

The creation of a national lithium company, as outlined last year, is still under evaluation by officials, with no specific timeline for further steps. Environmental protection measures will cover 30% of the salt flats, with specific areas yet to be determined, emphasizing the government's commitment to environmental conservation amidst lithium extraction activities.