A long-term shortage in the lithium market may be more detrimental for Chilean producers of the metal than the shorter-term price slump and supply glut, according to the country's finance minister.
“Production needs to increase so that it remains profitable and attractive to manufacture lithium batteries for electro-mobility,” Mining Weekly quoted finance minister Mario Marcel as saying.
As prices fall due to lithium overproduction, more mining companies may scale down output which in the long run can lead to a future shortage. This would send prices soaring and make alternative battery technologies more viable, robbing Chile of one of its major mineral export potentials. This South American country is the world's second biggest lithium producer.
The government recently unveiled a list of salt flats that will be opened up to mining as part of a plan to double output over the next decade under a new public-private model. Two thirds of additional production out of Chile would come from SQM’s planned partnership with state-owned Codelco, and the other third from new projects, Marcel said.
The government expects three or four new projects to be under development by 2026, including the Codelco-led Maricunga venture, one other area currently under the domain of a state company and a couple of private operations, Marcel said. Another mine on the giant Salar de Atacama “would be difficult” given water limits, he said.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
