The government of President Gabriel Boric has discovered six new brine deposits for the extraction of lithium in Chile. This announcement marks an important step in the country’s efforts to expand its lithium industry.
Chile aims to capitalize on its large lithium reserves, which are among the largest in the world. The government has identified these new areas for potential development of the private sector.
The move is part of Chile’s strategy to increase lithium production capacity. The country is looking to double its production over the next decade, despite the current saturation of the global market.
These newly identified deposits will be subject to consultation with local local communities before any mining activity begins.
Following this process, companies will be able to compete for contracts. Firms that already have exploration permits for at least 80% of an area can apply for contracts directly.
Mining Minister Aurora Williams and Economy Minister Nicolás Grau presented these details at a recent conference. The sites were selected based in part on expressions of interest from potential bidders.
Chile remains optimistic about long-term investor interest, believing in the strength of demand for electric vehicles despite recent price fluctuations.
Currently, only two companies produce lithium in Chile: SQM SA and Albemarle Corp., operating a single salt flat. Boric’s public-private model aims to diversify this landscape.
The state will take majority stakes in strategically important operations, while private companies will retain control in non-strategic areas.
The first group of non-strategic areas includes Coipasa, Ollagüe, Ascotán, Piedra Parada, Agua Amarga and Laguna Verde.
Additional areas will be announced next quarter. This phased approach allows careful management of resource development.
Background
Chile dominates the global lithium market with significant reserves and production capacity. The country holds 36% of global lithium reserves, estimated at 9.3 million metric tons.
In 2023, Chile produced 44,000 metric tons of lithium, representing 24% of global production. Despite recent increases in export volume, the value of Chile’s lithium exports has declined due to lower prices.
At the beginning of 2024, exports increased by 24% in volume but fell by 37% in value. China remains Chile’s largest market for lithium exports. Two companies, Albemarle and SQM, control most of Chile’s lithium production.
The mining sector, including lithium, plays a crucial role in Chile’s economy, contributing 13.6% to GDP and accounting for 58% of total exports in 2022.
These figures underline Chile’s leading position in the global lithium industry and its economic importance to the country.
