SQM Announces Investment of $ 150 million in metal mining exploration in five years
The company signed eleven agreements with third parties to develop a plan for minerals in much of their concessions. That will add another U.S. $ 45 million already disbursed by the company
A powerful exploration plan in metal mining has just announced the SQM company for the next five years.
The company signed eleven contracts with investors which will allocate a total of U.S. $ 150 million resource-seeking tasks in the concessions that today belong to the firm specializing in exploitation of minerals like iodine, potassium chloride, nitrate and lithium, among others .
According to SQM’s CEO Patricio Contesse, agreements aim at finding economically exploitable resources to be developed by third parties on the concessions that the company has.
“SQM is not able to explore all of their concessions, whether for financial, technical respources and time. So we open all concessions for third parties to jointly explore with SQM. We have already delivered more than one million hectares in more than eleven contracts we have signed, and look forward to signing contracts, “says Contesse.
But this would not be the only investment that would go in search of copper, gold, silver, molybdenum and zinc, among other metals, over the next five years. SQM’s idea is to continue the mining exploration plan in which from 2008 to date has already committed $ 45 million in equity.
Association model
Within the company there is agreement that if you want to develop metal mining deposits, this must be done in partnership with companies that have the experience in the field.
“This is a different business than we do, a lot of risk. There are large companies seeking partnerships, “says Contesse.
The example of this model was the finding Antucoya in the ’90s, when the company found a site which was then sold to Antofagasta Minerals, a company controlled by the Luksic group. The contract, in this case, included a royalty for SQM, which will be paid over the life of the reservoir.
“Mineral exploration is long-winded. In the 90s Antucoya was found. We sold the site and established a royalty based on the price of copper indefinitely, “explains Contesse.
The general manager says that the eleven contracts signed to date provide various formulas in case a resource is economically exploitable.
One hypothesis is that SQM is left with a minority of the project, which would imply to receive a future amount of money when copper production starts. Another option is not to own initiative, but establishing a royalty as with Antucoya.
The third scan plan contemplated that if results are not achieved, or is not able to analyze the entire area tendered, it will be returned to SQM the surface that was investigated. Thus, the firm may have in that area again for another operator who is interested in looking for minerals.
“To the extent that granting concessions will also have to go returning them to avoid being trapped. So, give a million acres and a time of exploration that is for four to five years, and then they have to return between 20% and 25% for these can again be re-tender in the market, “says the executive .
Contesse clarifies that it is a myth that SQM is the company that has the largest amount of mineral resources in the country. The executive explained that it is quite another to have a concession to own economically exploitable resources, such as those now hold major mining firms in the country.
Source: El Mercurio
