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Thursday, Feb 22, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Lithium

Codelco secures first lithium asset in Chile after takeover of Australian firm

The project is located on the Maricunga salt flat, which holds the country’s second lithium reserves

Codelco secures first lithium asset in Chile after takeover of Australian firm
The Maricunga property in the Atacama, Chile. Image via Lithium Power International.

Chilean state-owned copper giant Codelco secured its first lithium asset after shareholders for Australia’s Lithium Power International (ASX: LPI) approved the firm’s takeover.

The acquisition cost Codelco approximately A$385 million (approximately USD$254 million) and adds the Marcunga lithium project to its portfolio. The project is located on the Maricunga salt flat, which holds the country’s second lithium reserves.

Codelco said the transaction, which only needs the backing of the Federal Court of Australia, is expected to conclude on Feb. 23. The Maricunga project, located within the so-called lithium triangle in northern Chile, is estimated to contain about 1.9 million tonnes of lithium carbonate equivalent (LCE).

“With this purchase, Codelco moves forward with its mandate of becoming leaders in the production of critical minerals for the energy transition,” said Máximo Pacheco, chairmen of Codelco.

In April of last year, Chile announced a new public-private model for the sector, giving the copper giant a key role. This model calls for public-private partnerships for future lithium projects.

In contrast, a recent string of failed Australian lithium juniors acquisitions occurred.  Local local mining billionaires gatecrashed a series of deals in the latter half of 2023. These deals included Albemarle Corporation‘s (NYSE: ALB) A$6.6 billion attempt to buy Liontown Resources (ASX: LTR) and Sociedad Química y Minera‘s (NYSE: SQM) bid for Azure Minerals (ASX: AZS).

Chile already holds the world’s largest known deposits of the coveted battery metal. In late December, Codelco entered the first lithium business tie-up with SQM for the future development and production of the metal in the Atacama salt flat.

Read more: The most misunderstood metal: a lithium roundup

Read more: Lithium South and POSCO Holdings ink mutual development agreement

Lithium triangle site of protests

The lithium triangle has been the site of an escalating series of protests over the past month.  Indigenous populations have blocked roads to stall production. Codelco drew protests in response to its lack of communication with Chile’s indigenous population about an impending deal with SQM.

But the issue extends beyond Chile.

Earlier this month, activists in the Jujuy Province of Argentina gathered to protest a change in Jujuy’s provincial constitution. They claim that this change will simplify the process for mining companies to extract lithium from the Indigenous community’s land. They stayed in Argentina’s capital for an extended period to present their case to the Supreme Court.  After which authorities compelled them to leave.

The protesters expect a response from the Supreme Court and the Congress within 60 days.

Several companies are operating in the Argentina component of the lithium triangle. Among them are prominent players like Arcadium Lithium prc (ticker), Albemarle and Pohang Iron and Steel Company (POSCO) (KRX: 005490).

POSCO recently signed a cooperative development agreement with lithium junior Lithium South Development Corporation (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) for the development of the Hombre North Lithium Project (HMN Li Project) in the Salta Province of Argentina, where both companies have significant operations.

 

Lithium South Development Corporation is a sponsor of Mugglehead news coverage

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