Sociedad Quimica y Minera de Chile, already one of the world’s leading lithium producers, won a concession to exploit substantial reserves of the metal in the Andean nation’s northern region, officials said Monday.
For a bid of 19.3 billion pesos ($40.6 million), SQM gets the right to mine the deposits for 20 years.
Posco Consortium, made up of South Korean firms Posco and Daewoo International Corporation, Japan’s Mitsui and Santiago-based Li3 Energy, offered $17.3 million for the concession, and the third entrant, Chilean firm Sociedad Legal Minera NX UNO de Peine, submitted a bid of only $5.8 billion.
SQM will develop the reserves under a Special Lithium Operation Contract, known by the Spanish acronym CEOL.
Chile’s 1973 Mining Code defines lithium as a “strategic” mineral for which regular mining concessions cannot be awarded, but the constitution allows private exploitation of strategic minerals under special contracts.
President Sebastian Piñera’s conservative administration devised the CEOL to avoid violating the Mining Code.
While more than 60 companies initially expressed interest in the lithium concession, only three bids were submitted.
The Chilean government says it expects to collect $350 million via a 7 percent sales royalty on lithium, a key component in batteries for mobile devices and electric/hybrid vehicles.
Global demand for lithium 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 now.
Chile holds the planet’s second-largest lithium reserves, trailing only neighboring Bolivia.