Survey results: Chile holds 18% of world lithium resources
20-Ago-2012 La Tercera – News
Back in 1976 the country had 40% of resources however in 2011 top position was lost against Australia
Shortly before lithium special operation contracts (CEOL) are awarded – less than one month left – a survey carried out by Professor Gustavo Lagos of Mining Center of Universidad Católica university has concluded that Chile only has 17.8% of world lithium resources.
The figure, that may be explained by lack of new productive projects and exploration works, is in contrast with values recorded in 1976 and 2008 when Chile had 40% and 24% respectively.
Market estimates indicate world lithium reserves contained (proven) may vary in the range of four and thirty million tons, while mineral resources (potential or probable) would be between eight and fifty six million tons. The above does not include a new deposit reported in 2010 in Afganistan that would gather resources of about 36.8 million tons.
Gustavo Lagos explained that last important exploration work in Chile was carried out by SQM at Atacama Salt Flat “and that was long ago, while explorations in other regions has continued dynamically developing because exploitation projects call for it (…). Nowadays percentage or resources Chile has is lower than 20% and it will continue decreasing”, he warns.
In 2011 Chile lost its position of lithium world leading producer against Australia that only started its operations in 2007 with a 62 thousand tons of Lithium Carbonate Equivalent (LCE) against the 59 thousand tons Chile produced last year, 37% of global output.
It is Lagos’ opinion that it is almost practically impossible for Chile to recover its leadership during this decade because Australia production capacity is 120,000 to 130,000 tons of LCE compared against the 65,000 tons capacity of Chile. “Our country must re-assess its role in the lithium world, it will no longer be the leader for the next 10 years (…). Australia production capacity expansion is indicating Chile will continue losing ground over this decade”, he asserts.
Perspectives
World lithium demand in 2011 reached 24,761 tons and it is foreseen to increase about 7% per year over the decade. Rising demand would be driven by the increasing use of lithium for batteries elaboration going from 6% in 2000 up to 20% in 2008. Lagos states Chile may afford this consumption increment. “The country has about 20% overcapacity”, he says.
The lithium demand rise would imply prices increase, Lagos says. Price is currently around US$5,000 per ton.
The debate
CEOL contracts will be awarded next September 24. Lagos thinks that in spite of the effort the Government is making, it will not be enough to boost this industry. “CEOL contracts are a positive thing, but not enough. Ideally all political powers reach an agreement on how to exploit lithium in Chile”, he explains. Likewise, he also rules out against any consideration as to the possibility of having the State taking over the lithium resource as best option. “The State does not have any company today with capabilities to work lithium profitably. Codelco, for example, would have to associate with third parties who know the business and I do not see the advantages it would have for the state-owned mining company, especially considering that they are requiring to develop copper projects that are much more profitable for them “, he says.
In Chile lithium represented income in the amount of US$204 million, equivalent to 0.42% of mining exports in the country in 2011.
