Chile’s lithium policy of sustainability gives it the edge – mining minister

By Martim Facada
Published: Thursday, 14 December 2017

Chilean mining minister Aurora Williams has told Industrial Minerals that production of lithium added-value products (such as cathodes, battery components and lithium salts), sustainable governance of the country’s salt flats known as the Salars, and research and innovation are the main components of the country’s lithium policy.

Economic development is possible if it is done in a sustainable way, Williams told Industrial Minerals in an interview, emphasizing that Chilean President Michelle Bachelete and her cabinet have been working on the country’s current lithium policy since before coming into power in 2014.

The "Politica Nacional del Litio y Gobernanza de Salares" was implemented in 2016. This lithium policy is intended to promote the sustainable development of the Chilean lithium industry by taking into account the environment, the economy and the communities living within the Salars.

"In the Salar of Atacama, where SQM and Albemarle have their lithium operations, there are 17 communities and it is important to include them in this policy if we want to build a sustainable governance of the Salars," Williams said.

The Salars of Maricunga and Pedernales in Chile have yet to be developed, and Williams told Industrial Minerals that the Chilean mining ministry is waiting for Codelco to present a business plan to move forward with the development of future lithium production operations in these areas.

Chile has 52 Salars between the regions of Tarapaca and Coquimbo and, as part of the lithium policy, more producers of different sizes could enter the country to produce lithium and participate in this plan to develop the industry in a sustainable way.

The recent rapid increase in lithium prices has helped encourage a new strategic approach toward the Chilean hydric resources.

But high lithium prices are more of a "bonus" than a determining factor for the implementation of this policy, Williams told Industrial Minerals, adding that the planning and creation of the policy predates the rise in prices at the end of 2015.

Since mid-2015, Chinese domestic lithium carbonate 99.5% battery grade spot prices have increased rapidly to $24.19-26.15 per kg, according to IM’s October 26 market assessment, from an average price of $7.66 per kg in June 2015.

The Chilean government places importance on adding value to the lithium industry in Chile but of equal importance is the investment in research and development in the regions of the Salars.

Indeed, a main goal of the lithium policy is investment in research and innovation to promote the generation of shared added-value that includes the Salars communities and is sustainable, Williams said.

Ultimately, the government hopes to re-industrialize the lithium industry in a sustainable way, according to Eduardo Bitran, the executive vice president of the Chilean Economic Development Agency (Corfo), as Industrial Minerals reported in May.

Copper, cobalt and solar energy are also part of the Chilean plan to add value to the lithium industry within the country.

"We want to link lithium, copper and solar energy in the regions where lithium is extracted. We believe this triangle is very important from the research and innovation point of view, for adding value to the lithium supply chain in Chile in a sustainable way and by sharing value-added product generated from this relationship with the communities within the Salars," Williams said.

Chile plans to revive its cobalt industry in the region of La Cobaltera at some point in the future, but Williams told Industrial Minerals that the government is focusing on implementing the Chilean lithium policy first.

The success of the agreement between Corfo and Albemarle, and of similar agreements with SQM in the future, is a priority for the Chilean government, she added.