October 15, 2019 / 12:07 PM / 2 months ago

Russia's Rosatom may buy controlling stake in Chile lithium project

MOSCOW/SANTIAGO (Reuters) - Uranium One Group, a subsidiary of Russia’s state nuclear company Rosatom, may buy a controlling stake in a lithium project in Chile’s Atacama salt flat from Wealth Minerals Ltd (WML.V), the Canada-listed company said on Tuesday.

FILE PHOTO: An aerial view shows the brine pools of SQM lithium mine on the Atacama salt flat in the Atacama desert of northern Chile, January 10, 2013. REUTERS/Ivan Alvarado/File Photo

Under a deal struck with Wealth, the Russian nuclear firm has the option to purchase up to a 51% stake in Wealth’s Atacama project in northern Chile, the statement said.

Chile’s Atacama salt flat, home to leading lithium producers SQM SQMa.SN and Albemarle (ALB.N), accounts for around one-third the world’s supply of lithium, a key ingredient in the batteries that power electric vehicles, tablets and cell phones.

Rosatom’s interest in Chile’s lithium industry comes as electric automakers and governments scour the world for the metals needed to power the quickly expanding industry.

Chile, the world’s second biggest producer of lithium, has been slow to ramp up production further amid concerns that mining the white metal, which is found in brine pools beneath the desert floor, could sap scarce water supplies.

The Atacama is the world’s driest desert.

Rosatom, the world’s biggest nuclear company by foreign orders, previously offered Chile’s government technology it said could sustainably boost lithium output without taxing water resources, lobbyist transparency filings showed in December.

“Partnering with U1G (Uranium One) will help Wealth accelerate the development of lithium projects by using modern technology and moving away from outdated solar evaporation to a more efficient and environmentally friendly sorption technology,” Wealth President Tim McCutcheon said.

Wealth in August said Chilean environmental regulators had reviewed its plans to explore for lithium beneath the salt flat and had determined the company could proceed with exploration without filing an environmental impact study.

The project has nonetheless met resistance from the Atacama Indigenous Council, which represents 18 local communities. The council previously told Reuters it would move to block any new mines at Atacama because the impact on water supplies was unclear.

If the transaction with Wealth is closed, Uranium One would have the right to purchase 100% of the project’s production.

Several regulatory hurtles remain before Wealth can begin producing lithium from the Atacama salt flat.

Besides further environmental permits, Chile also requires private miners to partner with the state or obtain a special permit known as a CEOL to mine lithium on their own. They also need to obtain a quota to export the lithium from Chilean nuclear agency CCHEN. Rosatom said in June it planned to triple its revenue by 2030 thanks to foreign projects from Belarus to Bangladesh and new product areas.

Reporting by Polina Devitt and Dave Sherwood; Editing by Nick Macfie and Edmund Blair

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