Photo: Lithium reserves in Chile
Chile’s deputy mining secretary will travel in the coming days to Australia, Japan and South Korea in a bid to attract investors for an auction of contracts to develop the country’s lithium reserves.
Pablo Wagner will travel on Friday to Australia, where he will visit the cities of Sydney and Mackay, the Chilean government said in a statement.
He will later head to Japan to meet with government officials and executives of companies such as Mitsubishi and Toyota before making a final stopover in Seoul, where he will hold talks with private company executives.
Last month, Wagner met in the United States and Canada with representatives of investment banks, investment funds and mining firms interested in taking part in a bidding process for lithium contracts in Chile, which holds roughly a quarter of global reserves of the world’s lightest metal.
Winners of the bid process, launched last month, will sign a 20-year special lithium operating contract, or CEOL, with the government covering exploration and production of that mineral in Chile’s Atacama Desert.
President Sebastian Piñera’s conservative administration opted for that type of contract because, although Chile’s 1973 Mining Code defines lithium as a “strategic” mineral for which regular mining concessions cannot be awarded, the country’s constitution allows special contracts to be signed to exploit those reserves.
Under the contract terms, companies will be allowed to mine up to 100,000 tons of lithium over two decades. In exchange, they must agree to sell the lithium to the Chilean market or export it under the terms and conditions specified in the CEOL.
Currently only two companies - Sociedad Quimica y Minera de Chile and Sociedad Chilena de Litio - mine lithium in the Andean nation, the world’s largest producer of the metal.
Earlier this month, Piñera’s government urged state-owned giant Codelco, the world’s largest copper producer, to study the possibility of starting lithium production.
Potential investors have until July 31 to acquire the auction conditions and until Sept. 12 to submit their bids.
Through the CEOLs, the government plans to collect $350 million per project via a 7 percent sales royalty.
Chile’s opposition and experts have questioned the government’s move to open lithium mining to foreign investment, saying it is a resource that should be developed by the state.
Global demand for lithium - a key component in batteries for mobile devices and electric/hybrid vehicles - has tripled over the past 10 years, while Chile’s Cochilco state copper commission says the price of lithium carbonate on world markets has risen from $2,000 per ton in 2001 to around $6,000 per ton at present.
Chile holds the planet’s second-largest lithium reserves, trailing only neighboring Bolivia.