The director of InvestChile, Carlos Álvarez, indicated that this initiative is an essential part of a broader policy for Chile: its economic diversification.

The Road Show: Lithium Call Chile, which took place in Frankfurt, is part of efforts to boost the development of a value-added lithium industry and position Chile as a pole of innovation and development in Latin America. The event, organized jointly by InvestChile, CORFO and Albemarle, was attended by representatives of 15 companies from Asia, Europe and Oceania.

This “Lithium Call” seeks to attract local and overseas companies to participate in the call to develop – on special terms – value-added products related to lithium, with a view to the installation of companies and plants for processing products that form part of the production chain of items such as lithium-ion batteries for mobile phones, cars and other devices which are in high demand and use and have high prices.

The director of InvestChile, Carlos Álvarez, indicated that this call is an essential part of a broader policy for Chile’s economic diversification.

Decentralizing the value-added lithium industry

Demand for lithium has grown exponentially in recent years, due principally to technological advances and the process of change seen in the transport industry as well as the development of non-conventional renewable energies.

Currently, the value-added lithium industry, such as the production of batteries, is concentrated in Asia and the United States. However, Chile has the potential and the opportunity to create a pole of innovation and development in Latin America.

The director of InvestChile pointed out that, in this context, “Chile offers all the conditions for hosting and boosting the manufacture of lithium products, taking advantage of the proximity and cost of the raw materials as well as of other strengths such as the openness of its economy, its port and transport infrastructure, a network of trade agreements that covers most of the world and highly trained and specialized human resources. All these factors are as important as the production of lithium at low cost.”

What role do private companies play?

This initiative is the result of an agreement between CORFO and Albemarle (formerly Rockwood) which has opened the way for the companies that are selected in this call to have a guaranteed supply of lithium for 27 years at the lowest price in the market for long-term contracts. “Albemarle has shown the willingness and flexibility to adjust its contracts and processes in a model of public-private collaboration that could be replicated with companies in this and other sectors,” said the director of InvestChile. He emphasized that this relationship is conducive to the development of a lithium cluster and also benefits nearby communities, the company and the country. “This is a new form of sustainability that focuses on creating shared value with all the players involved, their relations with the government and the local communities.”

Competition and prices

Today, there are some 400 lithium production projects being developed in the world but the price of lithium continues to rise. In this context, Chile offers lower extraction costs than its competitors.

“If prices continue to rise in response to demand, as we have seen in recent years, producers’ margins will increase and that has an important benefit for Chile,” said Carlos Álvarez.

 

What is the route of other metals required for the production of batteries in Chile?

The production chain of lithium batteries also involves a series of other minerals such as cobalt, nickel and manganese.

The high level of specialization of Chile’s mining industry means that reserves of these minerals are already being explored and even their reuse from tailings is being analyzed as well as specific deposits

“Chile is already launching research and development projects to see how to extract these minerals at a competitive cost,” said Álvarez.

In this case, the opportunity to invest in Chile as a pole of innovation and development for lithium products would be even more attractive.