Peru has one of the largest lithium reserves: why is this metal important?

Peru could join the lithium industry in the face of the global energy transition in an increasingly technological world and in search of improving practices to preserve the environment. Alternatives that generate less negative impact are in high demand. Such is the case of the automotive industry, which, in its quest to abandon fossil fuels and switch to electric vehicles, requires large amounts of lithium to make rechargeable batteries.

However, nearby countries such as Argentina, Bolivia and Chile make up the ‘lithium triangle’, since between the three they gather 85% of this chemical element on the planet. According to him United States Geological Survey, Peru has approximately 880,000 tons of lithium in its territory, but what is known about this alkaline metal? In order to obtain more information, La República spoke with the former Vice Minister of Energy, Pedro Gamioand the former president of the Institute of Mining Engineers, Romulo Mucho.

Exploration of the lithium deposit in Puno

The Macusani Yellowcake mining company, which is a subsidiary of the Canadian Energy Metals, found a lithium and uranium deposit in a prehistoric lake covered with lava in the Puno region, 80 meters deep. The surprise discovery of lithium posed an extraordinary challenge for Peru, but, so far, advances in exploration have been halted.

Currently, there are two problems: an environmental impact statement, which is an ecological instrument to go forward, which is pending; and a contentious administrative action, a trial, between the current owner of the rights and the institution that protects the rights of the mining property on behalf of the State. “Once these controversies are defined, the level of reserves we have can be confirmed,” said former Vice Minister Gamio.

“The news of the discovery of lithium in rock in Macusani, Puno, at an international event on lithium in Santiago de Chile in 2017, was of global significance. Initially, the existence of 2.3 million tons of lithium carbonate; later, there was talk of a larger volume. Since that year, the finding and its progress have been disseminated in various events locally and internationally. This news was well received by the Peruvian mining and scientific community, although it was also Opinions appeared from skeptics who did not believe this (information). Lithium occurs in many places in Peru, but in small metallic contents that do not make its use viable,” said Mucho.

What is needed to carry out an adequate industrial and extractive development of lithium?

Both experts agree that exploration should be completed in Falchani, Macusani, to identify and quantify the existing lithium mineral reserves. Added to this, Mucho proposed:

• Need for high technological specialization that cannot be developed quickly.
• Geographical factor: car manufacturing centers are located at great distances, so the logistical factor can be a brake.
• There must be a guarantee of political and legal stability in the countries to attract investment.
• Competition for incentives: Countries that want to attract investment often offer incentives. If these incentives are correct, then factories can be installed, as long as they are economically and geopolitically favorable, finding alliances between the company, the State and the communities.

What uses can be given to lithium?

“Lithium represents 20% of a battery. We could move forward by exporting lithium carbonate, but we do not have a specific law that promotes adding value to this resource, which is strategic today in the world, in the fourth industrial revolution,” said the former vice minister. Pedro Gamio.

Regarding the use, the mining expert Rómulo Mucho expanded that not only this element is available, but also the one that could be assigned to it. “The main uses of lithium now are mainly in car batteries, cell phones, technology products. Also for the ceramic glass industry, lubricants and grease, air conditioning, among other uses,” he said.

“It is also good to know that producing lithium carbonate or lithium hydroxide only represents a small percentage of the price of a battery. The biggest challenge is moving up the value chain to industrialization: just having lithium is not enough, it requires high technology, access to the world market and being competitive at the same time. On the other hand, it is clear that if we do not give priority to the development of this project, we will be facing another missed opportunity,” he added.

Economic benefits of commercialization of lithium

“There is the possibility of having an important reserve of millions of tons of lithium carbonate, but this exploratory program has to be completed with the safety rules required by international standards. There is also a problem with the delay in the payment of rights by some of the concessions granted to the person who has led this project, and that is the subject of a judicial dispute, which complicates the continuity of exploration, Gamio explained.

“The lithium from Falchani in Macusani is found in rock, different from the salt flats in Bolivia, Argentina and Chile. Therefore, the cost of extracting lithium carbonate would be US$4,000 per ton. Prices have been increasing as it appeared the need to accelerate the search for other sources of renewable energy,” said Mucho.

“In 2015, it was quoted at US$5,900 per ton of lithium carbonate, in 2018, it had climbed to US$14,000 per ton. Currently, we are talking about more than US$50,000 per ton. If the Falchani project is a reality, it could be added with considerable amounts to our mining exports. If we produce about 20,000 tons of lithium carbonate per year, with investments of about US$600 million, we could conservatively add about US$1,000 million to our exports,” he argued.