Demand for lithium has skyrocketed in recent months following
a boost to demand for the batteries used in electric
vehicles. But Chile, which has the world’s
second largest lithium reserves, currently places the
material in the same category as uranium and is yet to
approve rules governing investment, according to company
executive director Marcelo Awad.
"The supply side of the equation will catch up, but I think
the market will continue [to be] in deficit or very tight for
the next seven to 10 years before the supply side can catch
demand. Why? Because Chile is running behind, because the
government has taken so long to release the regulatory
framework for investors," he told Metal Bulletin.
A draft of the regulatory framework is expected to be sent
to the state controller by early January, after which it
typically takes around two months to be signed into law. If it
is not approved before the change of government in Chile on
March 7, the new presidential administration of Sebastian
Pinera is likely to review the framework, which could take
several months more.
The framework is expected be supportive of investors,
"because Chile has been a mining country for 150 years and
always favored foreign as well as private investment, and
I’m confident it’s going to be
pro-business for lithium," according to Awad, previous chief
executive officer of London-listed copper miner
content of Chile’s lithium makes it ideal
for use in battery materials, with sole domestic
production so far coming from Atacama Salar in Region II,
host to more than 15% of the world’s known
The low-manganese content of Chile’s lithium
makes it ideal for use in battery materials, with sole domestic
production so far coming from Atacama Salar in Region II, host
to more than 15% of the world’s known lithium
reserves. Production there is from brines, which are formed in
seasonally-flooded dry lakes called salars.
Wealth Minerals have several projects over 100,000 hectares
in Chile, and lithium could become the country’s
second largest export after copper once investment starts to
flow into the country, Awad said.
The company’s most important project is also in
Atacama Salar, and spans around 46,000 hectares.
"Wealth Minerals acquired a number of concessions,
consolidated them, and is now putting money in the ground by
conducting geophysical drilling on three projects –
Laguna Verde, Trinity and Atacama Salar," Awad said.
Laguna Verde is in Chile’s Region III while the
Trinity project comprises land positions in three different
salars - Aguas Calientes Norte, Pujsa, Quisquiro –
located in close proximity to each other.
The results of initial drilling at the three projects are
due in the first quarter of 2018, meaning that by the second
quarter the company will have, "very good information from the
three salars about the lithium concentration. Our plan is to
continue developing all the salars we hold in our portfolio,"
The company is also analyzing a couple of mining concessions
in Argentina, but would more than likely give priority to
Chilean concessions once the regulatory framework is in
The strategic plan of the junior mining company is to
develop all deposits up to bankable feasibility study stage,
with all environmental permits in place, and then enter into
joint ventures for them.
The company, which is listed on the TSX Venture Exchange, is
most likely aiming to relinquish its majority shareholding at
this point and reduce its stake to 10-25% in order to secure
finance for the project to production stage, Awad
"We’re willing to listen to offers to joint
venture with a company looking to get involved at an earlier
stage, but we would then aim to keep our majority stake," Awad
"We have been approached by a number of parties and
we’re holding formal and informal discussions with
a number of them. There’s nothing concrete yet,
but one or two parties are very aggressively hoping to joint
venture with us, because they want to get involved in lithium,"
Aside from batteries in electric vehicles, lithium has an
important use as battery storage for energy.
"Lithium will be extremely important for electromobility,
not just in transportation but also in battery storage for
energy [for] solar and wind producers, who will be generating
energy and at the same time accumulating or storing energy.
This source of energy is going to become very cheap and
extremely popular," he told Metal Bulletin.
It will also be extremely beneficial for Chile, where energy
costs are among the highest on the continent. Although costs
have fallen over the last 12 months due to a number of
renewable energy projects, Awad noted there is "still room to
"Ultimately I think Chile will benefit from lithium
batteries for storing energy to continue generating overnight,"
Note: This article from the February 2018 issue
of Industrial Minerals' magazine was first published on
indmin.com on 4 January 2018.