Chile, Argentina to expand lithium output


Bolivia isn’t the only place where electric- and hybrid-car makers are looking to obtain lithium for use in the manufacture of next-generation batteries. Argentina and Chile, both home to significant lithium deposits, are the focus of growing interest as well.

With lithium-based batteries seen as the best near-term means of power storage for hybrid and fully electric vehicles, Bolivia would seem ideally positioned to capitalize. Experts say an estimated 5.4 million tons of lithium can be extracted from the country’s Salar de Uyuni, the world’s biggest salt desert. That’s roughly half the world’s proven lithium reserves. (See “Electric-car world looks to Bolivia’s Salar de Uyuni”—EcoAméricas, Nov. ’09.)

Development of the Salar de Uyuni deposits has been slowed, however, on account of Bolivian President Evo Morales’s demands that batteries and cars that use them be produced in his country under government control.

Argentina and Chile, meanwhile, are eager to compete for lithium-mining investment. They have big deposits of the mineral—two million tons and three million tons, respectively, which when added to Bolivia’s, amount to about 85% of the world’s known supply.

Toyota’s Argentine foray

Argentine Mining Secretary Jorge Mayoral announced on Jan. 20 that Toyota, the world’s leading hybrid-car producer, is joining a lithium mining venture in the country. Toyota Tsusho, a subsidiary in which Toyota owns a 21.8% share, has signed an agreement with the Australian mining company Orocobre to study the feasibility of lithium extraction in the Salar de Olaroz, a salt desert in Jujuy Province.

Orocobre had announced the acquisition of 11,250 hectares (27,800 acres) of the Salar de Olaroz, more than doubling the 10,000 hectares it already owned. The company said that putting the lithium mine in operation will require an investment of US$100 million. Experts estimate lithium will be extracted from the mine at a rate of 15,000 tons annually.

Argentina’s lithium production, until now limited to another area of salt flats called Salar del Hombre Muerto, totaled 2,800 tons in 2008, the most recent year for which official figures are available. The output is estimated to have reached 6,000 tons last year. Once mined, the lithium is exported to the United States, Britain, Germany and Japan, among other nations.

As in Bolivia, the prospect of lithium mining in Argentina and Chile has raised environmental questions. Rodolfo Tecchi, a biologist specializing in ecology at Argentina’s San Martín and Tres de Febrero universities, says a key concern is the intensive water use lithium extraction requires. Orocobre has not said what method it will use to separate lithium from other salts and magnesium chloride after it is mined, but Jujuy Province’s top mining official, Martín Sánchez, says the information will be included in a company environmental-impact statement.

National authorities report that about 30 companies have signaled interest in mining lithium in the north of the country on a dry plateau shared by the provinces of Salta and Jujuy. Mayoral, the Argentine mining secretary, visited Salta in December with the Australian ambassador when Australia’s ADY Resources announced that it intends to mine lithium in salt flats there called the Salar de Rincón. “The people of Salta can rest assured that not only will their environment not be degraded, but they’ll also have access to development,” Mayoral says. “Lithium is destined to be the most sought-after mineral in the next 50 years.”

Drawing more interest

Meanwhile, the U.S. company Li3 Energy announced last month that it would begin looking for lithium on the 15 tracts it controls in Argentina and Chile—a total of 81,000 hectares (200,000 acres).

Chile leads the world in lithium production, with 44% of the market. It is followed by Australia with 25%, China with 13% and Argentina with 12%, according to the government-run Chilean Copper Commission (Cochilco).

Chilean law views lithium as a strategic material and places use of it under government supervision. But Chilean Mining Minister Santiago González recommends a lithium task force be created to weigh reforms aimed at clarifying the public- and private-sector roles in the mineral’s extraction. The task force also would consider what value-added use Chile might make of lithium, which is located in the Atacama Desert. “Not only do we want to be exporters of primary material, we also want to bring technology to bear,” González says.

The two companies authorized to mine the mineral in Chile, both private, are Sociedad Química y Minera de Chile (SQM) and Sociedad Chilena de Litio. Their combined exports grew from US$141 million in 2006 to $220 million in 2007 and to $263 million in 2008, the last year for which figures are available.

Says Felipe Smith, SQM’s commercial manager: “Last year, we expanded our processing plant to a capacity of 40,000 tons annually to respond to the market demand we’re forecasting, although it is too soon to say that lithium will be the new copper in Chile.”

- Daniel Gutman

Rodolfo Baier
Communications Director
Chilean Mining Ministry
Santiago, Chile
Tel: +(562) 473-3000
Paola Rojas
Business Development
Rojas & Asociados Consulting Firm on Latin American mining
Mendoza, Argentina
Tel: +(54 261) 424-3479
Martín Sánchez
Director of Mining and Energy Resources for Jujuy Province
Jujuy, Argentina
Tel: +(54 388) 422-1428
Richard Seville
Managing Director
Brisbane, Australia
Tel: +(61 7) 3871-3985
Rodolfo Tecchi
National Agency for Scientific and Technological Promotion
Buenos Aires, Argentina
Tel: +(54 911) 5920-9193