Chile state miner Codelco filed with regulators on Friday a plan to begin exploration for lithium in its Maricunga salt flat holdings, a key step in advancing development of the country's second richest deposit of the metal needed for batteries.
The proposal, if approved, would allow Codelco, the world's top producer of copper, to pinpoint concentrations of lithium on the flat, estimate the size of the resource and identify necessary next steps.
The state-owned miner hopes to explore for as many as 10 months, the company said in a statement.
Codelco has for years talked of getting into the lithium business. But the cash-strapped miner has repeatedly delayed plans to develop its reserves to concentrate on copper, its primary business.
Demand for lithium is widely expected to skyrocket by 2025, but short-term oversupply has recently prompted several miners to delay major projects.
Chile possesses the world's largest reserves of lithium, a key ingredient in batteries for electric vehicles. But the nation's output has barely budged in recent years, as bureaucratic and environmental hurtles have long stymied development outside of the Atacama flat.
Maricunga's 145 sq. km make it less than 5% of the size of the vast lithium-rich Salar de Atacama in northern Chile. But high-grade deposits of the ultralight metal in some parts of the flat make it attractive to several prospective miners, although fractured ownership has long slowed development.
Codelco announced in 2019 a non-binding agreement with miner Salar Blanco to explore a joint venture at Maricunga. Salar Blanco is 50% owned by Australia's Lithium Power International LPI.AX, with smaller stakes held by Canada's Bearing Lithium and local capital. The two miners have yet to announce a firm deal.
Top Chilean lithium miner SQM SQM.SN, the world's No. 2 producer of the metal, also has holdings at Maricunga.
Chile's mining ministry in November asked SQM to decide what it will do with its holdings in order to help expedite development. SQM has yet to make public a decision.