Chile’s state-owned copper giant, Codelco, has recently entered into a groundbreaking deal with SQM to significantly increase the extraction of lithium, a crucial mineral in the transition to cleaner energy sources. This partnership aims to almost double the current lithium extraction capabilities of SQM, a leading player in the lithium market known as “white gold.”

Public-Private Collaboration for Sustainable Growth

The collaboration between Codelco and SQM will establish a public-private partnership focused on the production of refined lithium in the Salar de Atacama region from 2025 to 2060. Located in the desert of the same name, the Salar de Atacama is home to the primary lithium deposits in Chile, which forms part of the renowned “lithium triangle” along with Argentina and Bolivia.

The global demand for lithium has witnessed a significant surge in recent years as countries strive to reduce their reliance on fossil fuels and combat climate change. With its extensive applications in electric vehicle batteries and renewable energy storage systems, lithium plays a vital role in advancing sustainability goals worldwide.

Scaling Up Production for a Sustainable Future

Under the new agreement, Codelco and SQM aim to extract an additional 300,000 tons of lithium between 2025 and 2030, with a long-term production target of 280,000-300,000 tons per year from 2031 to 2060. This ambitious production goal reflects the commitment of both companies towards meeting the growing global demand for lithium and supporting the transition to cleaner energy solutions.

Government Support and Economic Benefits

Chilean President Gabriel Boric’s administration has expressed strong support for the expansion of lithium production in the country. With plans to establish a national lithium company akin to Codelco, Chile aims to capitalize on its rich lithium reserves and strengthen its position in the global market. As part of the partnership, Codelco will hold a 50 percent stake, plus one share, in the new venture, while the Chilean government stands to benefit significantly from the project’s operating margin.

In the past, Chile held the title of the world’s largest lithium producer, accounting for 37 percent of the market share. However, by 2022, the country had slipped to the second position behind Australia, with 243,100 tons of lithium produced, representing 34 percent of the global total. Despite facing competition from other major players in the lithium market, Chile remains optimistic about its prospects for sustainable growth and leadership in the renewable energy sector.

The expansion of lithium production in Chile through the collaboration between Codelco and SQM marks a significant milestone in the country’s journey towards a greener and more sustainable future. By ramping up lithium extraction and refining capabilities, Chile is poised to play a pivotal role in meeting the increasing global demand for this essential mineral and driving the transition to clean energy technologies.

Technology

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