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Chile's Codelco says to proceed with lithium plans at Maricunga after regulator approval

SANTIAGO, Nov 5 (Reuters) - Chile state miner Codelco said on Thursday it would press ahead with a plan to search for lithium in its Maricunga salt flat holdings after receiving a green light from local environmental regulators.

Codelco said in a statement that its plan had been approved by the Atacama Environmental Assessment Commission whose members voted 10-0 to allow the plan to go ahead.

Its exploration campaign would begin in April 2021 and involve a minimum duration of six months of work in the field and an estimated maximum of 10 months, it said.

“Depending on the results, specifically on the concentrations of lithium dissolved in the brines of said mining properties, Codelco will define whether it is environmentally and economically viable to move on to the next stages of the project,” it said. The approval represents a key step in the advancing development of the country’s second-richest deposit of the metal needed for batteries, and a first foray into the field by Codelco, the world’s top producer of copper. Codelco has for years talked of getting into the lithium business but amid liquidity constraints, repeatedly delayed plans to develop its reserves to concentrate on copper, its primary business.

Demand for lithium is widely expected to skyrocket by 2025, but short-term oversupply has recently prompted several miners to delay major projects.

Chile possesses the world’s largest reserves of lithium, a key ingredient in batteries for electric vehicles. But the nation’s output has barely budged in recent years, as bureaucratic and environmental hurtles have long stymied development outside of the Atacama flat.

Maricunga’s 90 square miles (145 square km) make it less than 5% of the size of the vast lithium-rich Salar de Atacama in northern Chile. But high-grade deposits of the ultralight metal in some parts of the flat make it attractive to several prospective miners, although fractured ownership has long slowed development. (Reporting by Aislinn Laing; Editing by Lisa Shumaker)