Chile estimates that lithium production from Codelco could start in the next six or seven years, Mining Minister Aurora Williams told Reuters on Wednesday (November 1).
“Based on the work that Codelco is doing right now, they should be able to start mining in the next six to seven years,” Williams said. Chile’s Atacama salt flat, where Codelco holds two salt lakes, accounts for roughly 37 percent of the world’s entire lithium output.
As the electric car revolution unfolds, demand for lithium, a key component in the batteries used to power electric cars, is expected to rise significantly in the next decade.
According to Benchmark Mineral Intelligence, supply of lithium carbonate equivalent will need to increase to 550,000 tonnes by 2026 from 75,000 tonnes last year to meet surging demand.
Codelco is currently one of the world’s largest producers of copper, another metal set to gain from the electric vehicle boom, and more than 10 companies have expressed interest in its lithium assets.
“Interest is in the lower double digits. Codelco is looking for partners for the process of valuing those lithium assets for their potential,” Chairman Oscar Landerretche said earlier this week, declining to give any names or say how large the deposit might be.
“But I would be cautious about overinterpretation because Codelco’s lithium possessions are two salt lakes in the Atacama region and in very early stages of exploration and development,” he added.
Chile will hold a presidential election next month, and the new government will take office in March 2018, but Williams hopes Codelco will make a decision on a partner before then. “This is Codelco’s decision, the company has its own board. But we hope that this final phase will realistically be over while we are still in government,” she said.
Chile is the world’s second-largest lithium producer after Australia, with total output of 12,000 MT in 2016. However, the country’s lithium production has flattened in recent years, as only two companies, SQM (NYSE:SQM) and Albemarle (NYSE:ALB), are able to extract brine under leases granted in the 1980s.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.