Chilean company and global leading lithium producer strengthens market position
The world leading lithium producer SQM has won a tender to develop a lithium concession in Chile, which produces around 40% of the metal, used widely in hybrid vehicles and computer and smart-phone batteries, the Mining Ministry said on Monday.
Chile's SQM offered to pay around 40.6 million dollars for a 20-year concession. It beat out rivals Posco Consortium, made up of Posco Ltd, Mitsui & Co, Daewoo International Corp and miner Li Energy Spa, and Chilean miner NX UNO de Peine.
Development of lithium has been tempered by a constitutional ban on concessions in world number one copper producer Chile. Special contracts for lithium production, however, are legally permitted.
Demand for lithium batteries has risen in recent years because they are more efficient and help cut carbon emissions. The rising popularity of smart-phones, which need longer-running batteries, has also helped.
The concession could boost global lithium supply by around 15%, Deputy Mining Minister Pablo Wagner has said.
The chief operating officer of SQM, which also produces fertilizer and iodine, is the brother of Mining Minister Hernan de Solminihac. The Minister is not participating in the development of the lithium contracts to avoid a conflict of interest.
SQM held around 31% of the global lithium market share in 2011, according to the company. Some in Chile have decried the tender, accusing the government of surrendering a valuable resource to private hands.
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Ah! The big bad private company who is going to pay USD 40.6 million for the privalege of spending further millions and take the risk that the market isn't flooded by other ore and mining companies BEFORE they make a profit.
I really thought Chile had come out of the leftist nonsense that chokes the rest of LatAm, perhaps I was mistaken.
WELL DONE THE CHILEAN GOVERNMENT.
Typical comment from a moron that's stuck in the fake left vs right paradigm.
Edward R Anderson
TRU Group Inc Lithium Consultants
trugroup.com
But in your opinion was the tender process genuine?
@3 Still haven't answered my question have you Dildo?
I don't know enough about it. The usual knee jerk reactions went off in the press this morning, but I guess this week there will be better info in the press about it. Mr TRU above is probably right.
My point was that this gov't has not done a great job managing this kind of issue.
Keep growing, Chilito, while others fall down, che.....viste...!!!
Thanks for that.
Your point about the government is, in my experience, true for western governments as well.
They usually say 'you have elected us to do these things, trust us to do it right'. Then you find that for a number of reasons they have made a balls up of it! :o)
You are correct, but this story is still going to run in the press for a while, it is already looking like a polemic issue.
Chris,
The Chilean case is different from western issues of a similar nature. Basically this is a bump in the long road of transition from dictatorship to democracy. Although the right to vote returned overnight (on return to democracy) the process to rebalance and reduce many of the interests and influences of the pre-democracy government is a much slower process. Wisely in Chile this change has been natural rather than a witch hunt. The first 20 years of transition were under the Concertacion (now in opposition) who did nothing about this particular issue (as is the case with education reform) whilst in power, so they are being opportunistic by throwing petrol on the fire here.
In the end, I think most of us will look at the business case, the investment, the exports and the jobs and agree the right decision has been made.
=)
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