The government of Chile is getting ready to promote its lithium mining industry by auctioning new lithium mining contracts. Chile is currently the world’s largest producer of copper and also has a quarter of the world’s known deposits of lithium.
The rights to explore and produce lithium will be auctioned in Santiago mining sub-secretary Pablo Wagner said to La Tercera, local media website. He added that the right to exploit around 100,000 tonnes of lithium for 20 years will be auctioned. They knew that that if they delayed a lot in developing this project they would lose competitiveness and they could halve their market share.
Lithium is needed to produce hybrid vehicles, computer and smartphone batteries, amongst other technological gadgets. So far a constitutional ban on concessions has been responsible for a stunted growth for the lithium mining sector in Chile.
As of today just two companies are actively involved in producing lithium in Chile. These are Sociedad Quimica y Minera de Chile SA and Sociedad Chilena del Litio, a subsidiary of Rockwood Holdings Inc. There have been no new lithium concessions issued in the country since 1982.
To rectify this he government will offer Special Lithium Operations Contracts. This has been termed CEOL by its Spanish abbreviation, and they will not require any changes to existing mining laws. Lithium is classified as a strategic mineral. A CEOL will give a mining company the right to produce up to 100,000 metric tons of lithium a year, paying the government a fee of 7% of annual sales.