Chile to clean up rules for lithium industry to boost production

SANTIAGO (Reuters) - Chile´s Mining Ministry said on Tuesday it would release in “the coming weeks” a plan to clarify rules around its lithium industry to maintain its global share of output amid spiraling demand for the coveted battery metal.

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At a gathering of lithium investors in Santiago, Mining Minister Baldo Prokurica said the administration of center-right President Sebastian Pinera would push both state and private investment to double Chile´s production to 230,000 tonnes of lithium carbonate equivalent per year by 2023.

“This government is not partial to either the private or public sector when it comes to the development of lithium,” Prokurica told the Fastmarkets Lithium Supply and Markets Conference.

Lithium is a key ingredient in the rechargeable batteries that power everything from cell phones to electric vehicles.

Chile´s existing policy toward lithium has been criticized as confusing and uninviting to newcomers. Despite prime production conditions and upward of 50 percent of the world´s reserves, according to United States Geological Survey data, the country has not permitted a new lithium mine since the boom for the metal began in 2014.

Chile now requires private miners to partner with the state or obtain a special permit known as a CEOL to mine lithium on their own.

The problem, would-be miners say, is that the government has yet to provide guidelines for obtaining a CEOL. It also has not announced a uniform royalty or tax scheme that would help investors gauge the risks.

Pablo Terrazas, Chile´s vice minister of Mining, told participants of the lithium conference that the soon-to-be-released new rules would fill these voids and add safeguards for the environment and local communities.

“We´ve learned much from our errors and we think now is the moment to correct them,” Terrazas said.

The new projects, Terrazas said, would help Chile maintain its share of global lithium production amid a sharp increase in global demand.

Chile has recently lost ground to competitors. Australia in 2017 surpassed the South American nation to become the world’s top lithium supplier. Neighboring Argentina is also positioned to gain fast, with at least a dozen projects in the pipeline.

(For a graphic on global lithium production, see:

Prokurica emphasized Chile´s geological advantages, citing the country´s 45 salt flats. Currently, the Atacama salt flat, one of the world´s richest known sources of lithium, accounts for all of Chile´s production of the ultralight metal. Top producers SQM and Albemarle Corp operate there.

The Ministry said it was also working on a database to describe the resources available in Chile´s salt flats, to help guide investors and newcomers seeking to develop new mines.

Emma Hall, Tianqi Lithium Corp’s vice president for corporate development and marketing, said she saw opportunities for new players in Chile´s market but said rules were not the only constraint.

“We´re all looking forward to details of the new policy to be published,” she said. “It’s not just the regulatory approvals that are required. You´ve got to have a good resource.”

Reporting by Dave Sherwood in Santiago; Editing by Bill Trott and Matthew Lewis