Chile, known for its vast mineral resources, is making moves to solidify its position in the global lithium market. With a recent deal signed between Codelco and SQM, there are high hopes for the expansion of lithium production in the Salar de Atacama region.
The partnership between Codelco, the world’s largest copper producer, and SQM, a leading lithium producer, aims to significantly increase the extraction of lithium in the Salar de Atacama. This comes at a time when the demand for lithium is soaring due to the transition to cleaner energy sources.
By 2030, the companies plan to extract an additional 300,000 tons of lithium, with an annual production target of 280,000-300,000 tons from 2031 to 2060. This ambitious goal sets the stage for Chile to become a key player in supplying lithium for electric car batteries and other clean energy technologies.
Chile’s new leftist President, Gabriel Boric, has expressed intentions to create a national lithium company similar to Codelco. With Codelco set to own 50 percent of the shares in the new partnership, the Chilean government stands to benefit from a significant portion of the operating margin generated by the increased lithium production.
While Chile has historically been a major player in the lithium market, the rise of competitors such as Australia poses challenges. However, with its vast lithium reserves and strategic partnerships, Chile has the opportunity to regain its position as a leading lithium producer on the global stage.
The future of Chile’s lithium industry looks promising, with the recent agreement between Codelco and SQM paving the way for increased production and greater involvement from the government. As the world shifts towards cleaner energy solutions, Chile is well-positioned to play a crucial role in supplying the essential mineral needed for this transition.
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