Chile’s Codelco abandons plans to mine lithium

Chile’s State-owned Codelco, the world’s No. 1 copper producer, is shelving its plan to bring in international partners to develop the country’s vast reserves of lithium, as the company —reports Pulso (in Spanish)— has decided to focus on its $27 billion projects pipeline.

Chile owns 70% of the world's known lithium reserves. But due to current regulations, dating back to 1986, only two companies are allowed to mine the increasingly popular metal used as a key component in smartphones, hybrid cars and computer batteries.

Late last year, the Chilean government attempted to bypass this legislative obstacle by launching a tender for special lithium contracts, but the process was cancelled after irregularities came to light. The main issue was that the top executive of the winning company, was Chile's Minister of Mines’s brother, which many argued could have meant he had access to classified information.

The failure of that tender, as well as political and civil opposition towards the awarding of lithium concessions has made the legal path towards lithium mining in the South American nation quite uncertain.

But Robert Baylis, industrial minerals research manager at UK-based Roskill Information Services, says the move would be worth it, as the market for the commodity is growing at a brisk pace and is dominated by only a handful of firms, including SQM, FMC, ROC, Canadian miner Talison Lithium and mining behemoth Rio Tinto.

Image by REdUSE