Chile promotes public bids to find new lithium producers to maintain global position

RIO DE JANEIRO, BRAZIL  – The global competition for lithium extraction is gaining strength, and Chile is reacting in order not to continue losing ground. The Ministry of Mining has launched a national and international public tender for special operating contracts to explore, exploit, and beneficiate lithium deposits.

The tender considers 400,000 tons of marketable metallic lithium, divided into five individual quotas of 80,000 tons. According to the publication in the Official Gazette, each bidder may only be awarded a maximum of two percentages.

Thus, no bidder may be granted the right to exploit more than 160,000 tons. As a reference of the magnitude, SQM is working on a project to produce 120,000 tons per year in the country.

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“The awarded quotas will be indivisible, that is, they cannot be the object of any subsequent contract that allows their partial transfer or assignment”, they point out. They also detail that the particular lithium operation contract may only be transferred to a third party with prior authorization under the conditions established by the Ministry of Mining.

In a press release, the Ministry of Mining explained that there would be a seven-year term for geological exploration, studies, and development of the project, extendable for another two years and another 20 years for production.

The justification for launching this tender, according to the authority, is “the increase in world demand for lithium and the global challenge of promoting new technologies that help combat climate change and migrate to cleaner energies, which represent the opportunity to increase the development of the lithium industry in Chile and strengthen its strategic position, bringing benefits to the country and its inhabitants.”

In addition, the State will receive a royalty for the award of the quotas and a variable payment during the production stage.

According to a report carried out by the international consulting firm CRU, called Changes in the demand for minerals, mandated by the Economic Commission for Latin America and the Caribbean (ECLAC), by 2030, China would be positioned as the second-largest lithium producer, displacing Chile to third place. Australia had previously surpassed Chile.

The terms and conditions explain that the contract will have a maximum period of 29 years from the date of the complete processing of the administrative act approving the agreement, unless, before the expiration of the referred term, the Contractor reaches the production quota of eighty thousand (80,000) or a percentage of 160,000 tons of marketable metallic lithium.