State-owned Chilean copper miner Codelco announced Wednesday it will lead a new government-controlled lithium exploration joint venture. It will partner with Sociedad Química y Minera de Chile (SQM) (NYSE: SQM) for the initiative.
The combined company will focus on battery metal production in the Salar de Atacama: Chile’s largest salt flat and number one lithium brine resource. The nation’s President, Gabriel Boric, was pleased with the development. He announced plans to nationalize the country’s lithium industry last April.
“This is an unprecedented milestone in Chile’s mining industry and a concrete step towards achieving fair and sustainable development,” Boric said. The new joint venture will take over previously established contracts between Chile’s government organization CORFO and SQM until the end of 2030.
Its first phase of operations commences in 2025 and activities are expected to continue until 2060. The company’s primary focus will be the “Salar Futuro” exploration project, set to begin in 2031, and new contracts signed with CORFO as part of the joint venture agreement. Codelco says the future operation in the salt flat will incorporate new efficient technologies.
“Today, Codelco begins a new cycle,” Máximo Pacheco, Chairman of the Board at Codelco, said. “From now on, we will be a leading copper and lithium mining company worldwide.”
However, the president of Chile’s mining council is not happy with SQM and North Carolina’s Albemarle Corporation (NYSE: ALB) having complete control over Chilean lithium. Those companies are the only ones currently mining the commodity in the country.
“There could be bidding on contracts in other salt flats in Chile, and that isn’t happening,” Chilean mining council President Joaquin Villarino, said at the end of November. “What does not seem reasonable is that the entire development of the lithium industry depends on the negotiation of Codelco’s contract with SQM.”
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Argentina’s government enhances mining focus
Chile’s neighbouring country has taken actions to promote mining in recent days as well, with less domestic control. Argentine President Javier Milei just implemented an expansive series of changes to government regulations. Those regulations were partially intended to benefit mining companies in the state.
Well-established French company Eramet S.A. (EPA: ERA) recently invested US$800 million in Argentina’s lithium sector. Exploration in the country is not limited to state-selected companies.
Meanwhile, junior explorers like Recharge Resources Ltd. (CSE: RR) (OTC: RECHF), Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) and Argentina Lithium & Energy Corp. (TSX-V: LIT) (OTC: PNXLF) are working to capitalize on the country’s lithium resources as well.
The major automotive company Stellantis (NYSE: STLA) sunk US$90 million into Argentina Lithium this September to help secure a necessary supply of the battery metal for its electric vehicles. The country’s resources have attracted major investors.
Within the next few years, Argentina’s rate of lithium production is expected to increase six-fold. This is according to the country’s mining secretary, Fernanda Avila.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
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