Argentina, Bolivia and Chile concentrate no less than 85 percent of the world’s known reserves.
Lithium is used to make batteries. These batteries are needed for mobile phones, solar panels and electromobility, read electric vehicles. In other words, we are dealing with a valuable mineral, which can bring juicy profits to the States that have reserves and know how to exploit them. Three of the countries with the best prospects for benefiting from this product are in South America, and in fact make up what has been called the “lithium triangle”. These are Argentina, Bolivia and Chile, which concentrate no less than 85 percent of the world’s known reserves.
In this context, it was known last week that the Chilean government had granted two licenses for mineral exploration and exploitation to a Chinese company and a Chilean company owned by Francisco Javier Errázuriz, son of the former presidential candidate and former senator of the same name. These are permits to search for lithium for a period of seven years and exploit up to 80,000 tons, paying a 60 percent royalty. For this award alone, the Chilean State pocketed 121 million dollars.
And although the Court of Appeals of Copiapó, in the north of the country, suspended the bidding process after an appeal for protection presented by the governor of Atacama, Miguel Vargas, in no case can there be talk of an annulment. Chile’s government is due to deliver a response to the suspension in the coming days and it is unlikely that the legal process will prosper to the point of putting the tender on the line. The outgoing government and the one that will take office in March, with Gabriel Boric at the helm, agree on the importance of lithium for the fiscal coffers of a country in need of resources to solve its social agenda, and the figures at stake are enormous.
More economical production
Nowadays, The world’s largest lithium producer is Australia, with 40,000 metric tons per year. Then they come Chile (18,000), China (14,000) and Argentina (6,200). With this tender, which put on the table a tiny part of the country’s known reserves, Chile seeks to improve its position and generate a long-term strategy that allows it to produce more and eventually add added value. The elected president, Gabriel Boric, has even proposed the creation of a National Lithium Company, an idea that the right also welcomes.
The two South American countries mentioned, together with Bolivia, also have an advantage over Australia, the world leader. South American lithium is salted (brine), that is, a settling process is enough, which, although complex, is up to 4 times cheaper than extracting lithium from hard rock, which is the one that is mainly exploited in Canada, Australia , Portugal and Brazil.
Bolivia has tried since the end of the first decade of this century to promote a lithium industry, signing exploitation agreements with Russia and Germany. The objective of the then government of Evo Morales, who since 2006 promised that this mineral would be the driver of the country’s economic development, was to extract, but also to generate knowledge and achieve technology transfer. The coronavirus crisis and the political chaos in which Bolivia has been plunged in recent years have slowed down the process.
In the German case, in 2019 the decree that authorized the creation of a mixed company made up of the Bolivian state company and a German firm was even repealed. In March 2021, Germany and Bolivia resumed negotiations on the matter.
In 2019, Evo Morales signed an agreement with a Chinese firm for the construction of lithium carbonate plants in the Coipasa salt flats. That same year, Bolivia managed to produce 400 tons of the mineral. Little, when compared to the productive level of its neighbors. With 6,200 tons, Argentina is the second largest producer in South America and Japanese and Australian companies operate in its territory, and there are planned investments by Chinese, South Korean and American firms for more than 2 billion dollars, mainly in the provinces of Salta and Catamarca.
the german treasure
The importance of lithium has a lot to do with the rise of renewable energies. Following the 2015 Paris Agreement, countries have committed to reducing the use of fossil fuels, and lithium batteries play a central role in that transformation. It is estimated that in the coming years its use will increase exponentially, and as we have seen, the production of the raw material is already a business that moves millions of dollars. For this reason, it has also acquired a geostrategic importance.
The whole of Europe depends mainly on lithium imports, since local production (focused on Portugal) manages to supply just 13 percent of continental needs. Depending on China or third countries can be a problem for European technological development, but also in geopolitical terms. To solve the issue, Germany hopes to inaugurate a huge plant in Guben (Brandenburg), which aims to produce up to 24,000 tons of lithium hydroxide per year from 2024. The raw material will be imported from Canada by the German-Canadian company Rock Tech Lithium.
And if that was not enough, the German company Vulcan Energy Resources affirms that, under the Rhine River, in the south of the country, lies a vein estimated at 15 million tons of lithium, enough to manufacture 400 million batteries for electric vehicles. The firm, led by the geologist Horst Kreuter, needs to invest 1,700 million euros to exploit the ore, which is molten thousands of meters deep. If successful, it can lead Germany to self-sufficiency in lithium, boost electromobility and end dependence on other countries. (I)
Paul is a talented author and journalist with a passion for entertainment and general news. He currently works as a writer at the 247 News Agency, where he has established herself as a respected voice in the industry.
