Just under one month until Chile’s new president takes power
As you know, at the end of 2017, the lithium mining sector received a major boost with the re-election of centre-right-leaning Sebastian Pinera as the country’s President. Well, I say it’s a win for the lithium sector but, more importantly, it’s a particular win for those of us operating in Chile.
A Harvard-trained economist and billionaire, Pinera – who governed from 2010 to 2014 – has campaigned to jump-start economic growth in the world’s top copper and lithium exporter by implementing more business-friendly policies than his center-left predecessor, Michelle Bachelet.
Market observers agree that Pinera’s victory does not mark a dramatic shift from Chile‘s long-standing free-market economic model, but his victory underscores an increasing lean to the right in South America following the rise of conservative leaders in Peru, Argentina and Brazil. He won by a greater-than-forecast margin and he is due to be sworn in on March 11 – just under one month from now.
Chile is part of the ‘Lithium Triangle’ – the world’s most prolific lithium producing region locked between Chile, Argentina and Bolivia, with Chile being the world’s largest and lowest-cost producer of the energy metal.
The country already has one of the world’s most streamlined mining codes, facilitating low-cost acquisition and rapid exploration, which, coupled with rising demand for lithium as a critical input to manufacture lithium-ion batteries used in consumer electronics and electric vehicles (EVs), has resulted in an explosion of juniors vying for exploration rights in the country.
The Pinera government is expected to create an agency that actively supports large-scale and greenfield mining projects. He has pledged support and stable funding for Chile‘s state-run miner Codelco, and has promised to slash red tape that has ensnared projects under his predecessor.
Pinera’s government may well begin by reforming Bachelet-era labour laws and the process of securing mining permits, which miners say have hindered growth and investment. Bachelet has also been criticized for handing too much power to unions and made it increasingly difficult for employers to fire striking workers, so we may see changes there as well.
This is not Pinera’s first time in power. His earlier administration was marked by a vibrant economy, supported by thriving copper prices. Pinera has also promised to make Chile the first country in Latin America to achieve ‘developed nation’ status in the Paris-based Organization for Economic Cooperation and Development (OECD).
We may also, hopefully, see Chile depoliticising the process of securing mining permits. Making the process more technical and transparent will impact the mining sector positively and improve the speed at which new projects can move towards construction decisions.
Chile is an ideal lithium-mining destination, boasting low precipitation and high evaporation rates, which give the jurisdiction a world-leading lithium production advantage. Combined with about 53% of the known global lithium reserves, production costs are among the lowest at about $1 800/t, compared with Australia’s hard rock production that averages at about $5 000/t. In 2016, Chile produced about 76 000 t of lithium carbonate equivalent.
It’s in this great jurisdiction that we at Lithium Chile have amassed one of the largest lithium-focused exploration portfolios., Together, our properties comprise 140,100 ha spread over fifteen projects. These include 56 km2 on the Salar de Atacama – host to the world’s highest concentration lithium brine production plants and currently the source of about 30% of the world’s lithium output.
Sampling conducted by Lithium Chile to date has yielded lithium assay results from surface and near-surface brines of up to 1 410 mg/ℓ, 1 330 mg/ℓ and 1 280 mg/ℓ on three of our 15 properties. These concentrations are comparable with the production grades from the Salar de Atacama and as you can imagine, these are top priority projects for us.
If you have any questions, don’t hesitate to get in touch with us and be sure to “watch this space” as we progress with our exploration programs.
Steve Cochrane, CEO of Lithium Chile