Lithium: A potential 'gold mine' for Chile
Chile has for many years had a huge market share of world copper production. However, copper is not the only natural resource that Chile has been blessed with an abundance of; The mineral rich country also dominates the world market in lithium (see figure below), accounting for as much as 58% of current world reserves according to the US Geological Survey.
Source: US Geological Survey.
Lithium has many uses but is currently perhaps most important in the use of glass and ceramics production (29%) and in the production of batteries (27%) US Geological Survey. Over recent years there has been a noteworthy switch of the use of lithium over nickel in batteries which may account for the incerase in world lithium demand. Although this is primarily due to the increase in use of rechargeable batteries in electronic goods - there is a potentially massive market for lithium courtesy of the entrance of the electric car to the world stage. Estimates vary, and like all projected figures, they are subject to missing their mark wildly, but one study from the University of California, Berkeley has suggested a clear rise in the demand for battery driven vehicles.
Source: Center for Entrepreneurship & Technology, University of California. Estimates are most conservative, assuming no high fuel price or subsidised purchases.
There is, therefore, a huge potential for Chilean government and industry to capitalise on this emerging market. Speaking on the potential for lithium to be developed in Chile, the Undersecretary of Mining Pablo Wagner has commented that, " we have 1,500 years of lithium, the best prices and logistic capacity to be industry leaders." However, he was also quick to warn that, "it might be that other countries will advance faster than us." Urgency is the order of the day and there are certain complications that may hinder the rapid development. For example, under General Pinochet's regime in the 1990s lithium was classified as a 'strategic' metal because it can be used in the process of nuclear fission and so opening up the resource to further mining and development may be a problem that ultimately needs legislation to circumvent. Nevertheless, there appears to be a sentiment in some quarters in Chile urging for a push to modernisation. Recently, Senator Carlos Cantero suggested that, "... there is a need to create a Chilean Insitute for Lithium, that is to say, a space where we can develop this industry further."
Do you think the electric vehicle market will boom over the next twenty years? Or is lithium just a flash in the pan?
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