SANTIAGO, April 24 (Reuters) – Chile will begin discussions with SQM (SQMA.SN) over its Atacama operations “this semester” to convince the world’s second-largest lithium mining company to sign a public-private model led by state, the economy minister said on Monday, while SQM said it would need to invest an additional $2 billion under the new strategy.
In his first interview with international media since the government announced plans last week for state control of the metal key to electric vehicle batteries, Economy Minister Nicolas Grau told Reuters that the miner of State Codelco would begin talks on public-private lithium production “as soon as possible”. “
While Codelco dominates copper production in Chile, the world’s largest copper producer, the state has yet to produce lithium.
“Codelco’s conversations with companies that operate in the Salar de Atacama, particularly with SQM, which ends its contract in 2030, is something that will begin immediately during this semester,” Grau said.
In a statement released later Monday, SQM said it met with Chilean state development office Corfo to discuss lithium strategy and said the company would need to invest $2 billion in additional capital to meet the sustainable goals. plan.
Grau added that progress was also expected with US-based Albemarle Corp (ALB.N), the world’s top lithium producer, whose contract expires in 2043.
SQM, based in Albemarle and Santiago, are the only two lithium producers in Chile and operate in the Atacama salt flats, which holds 90% of the Andean country’s lithium reserves. Shares of both companies fell on Friday after President Gabriel Boric’s nationalization announcement.
At the close on Monday, SQM shares had recovered 6.1% while Albemarle had rebounded 5.9%.
Asked about the minister’s statements, Albemarle said they had no new comments and referred to their previous statement that the plan would have “no material impact on our business”.
“As for the conversations related to the Salar de Atacama, I want to be very clear on that, it is something that is going to be defined during this government,” Grau said, adding that there is no no concrete deadlines, but all players are aware of the urgency involved. The next national election is scheduled for 2025.
The strategy includes a new national lithium company, which Congress must approve, but Grau said the government believes Codelco has the “capacity to meet new challenges” as well as “the scale and know-how” to manage. lithium.
Grau added that Codelco can start moving forward with establishing public-private partnerships with companies that have advanced explorations in the Maricunga salt flat.
For other salt marshes, Grau said agreements will depend on development timelines, the productive and strategic value of each project.
“It is reasonable to leave some space so that the concrete public-private structuring of each salar depends on the interest of each,” Grau said, adding that Boric noted that the government “control will be reserved for the salars considered strategic.
Chile, which holds the world’s largest lithium reserves and is the world’s second largest producer after Australia, mainly produces the white metal from salt lakes, rather than from hard rock mines.
Grau added that the government would start early to hold talks with local and indigenous communities in the Atacama Salt Desert. Some communities have strongly opposed lithium projects, but the government has said it will increase production while taking care of ecosystems.
The minister said that most of the implementation steps of the new lithium strategy will be implemented this year, but the establishment of a new national lithium company may take longer.
Reporting by Fabian Andres Cambero; Editing by Josie Kao
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