SANTIAGO (Reuters) - Chile’s state-owned Codelco [COBRE.UL], the world’s top copper miner, said on Thursday that it signed a non-binding agreement with foreign-backed miner Salar Blanco to develop a joint lithium project at the Salar de Maricunga in the country’s north.
The memorandum of understanding with Salar Blanco, which is 50% owned by Australia’s Lithium Power International with smaller stakes held by Canada’s Bearing Lithium, comes after a disagreement over adjoining lithium deposits in the Maricunga salt flat.
In May, Chile’s constitutional court declined to weigh in on Salar Blanco’s lawsuit alleging that Codelco was constitutionally barred from mining lithium.
“The companies will negotiate the definitive terms of the association that allow them to carry out this initiative, combining the experience that both have in the area in order to maximize the value for Codelco and MSB,” Codelco said in a statement.
Construction on the project is expected to begin in 2020 or early 2021 after the permits and financial structure are finalized, Codelco said.
Lithium is a key ingredient in the rechargeable batteries that power everything from cell phones to electric vehicles. Chile possesses the world’s largest reserves of the “white gold” and sits atop the so-called Lithium Triangle, yet the government has not capitalized fully due to a national lithium policy that has been criticized as confusing and uninviting to newly arrived private miners.
Maricunga’s 90 square miles (145 square km) make it less than 5 percent the size of the sprawling Salar de Atacama in northern Chile, home to top lithium producers Albemarle and SQM, but Salar Blanco has described it as one of the “highest-grade lithium brine salars globally.”
Until now, Codelco had delayed plans to develop its lithium reserves to concentrate on its key copper production business.
Reporting by Fabian Cambero; writing by Cassandra Garrison; Editing by David Gregorio