Chile's Codelco wins new lithium quota in SQM partnership

Codelco, the state-owned copper producer in Chile, announced on Tuesday that it had received regulatory approval for an additional lithium quota. This cleared one of the last remaining obstacles to producing the battery metal via its

Joint venture

SQM is a miner. Codelco reported that Chile's nuclear regulator CCHEN had approved the extraction of 2.5 millions metric tons lithium metal equivalent (LME), from 2031-2060.

If the joint venture obtains the necessary environmental permits to expand production, the approved amount can rise to 3,02 million metric tonnes for the same period of three decades.

Codelco stated that if CCHEN granted the higher quota it would allow the production and sales of up to 330,000 tonnes of lithium carbonate (LCE) a day for the next three decades.

Since 1979, the nuclear agency has approved lithium exports and quotas. This is because the military government under ex-dictator Augusto Pinochet declared lithium to be "strategic", due to its nuclear applications. Metal is a major component of electric vehicle batteries.

Before the Codelco-SQM agreement can be finalized, it still needs two important elements - approval from China and consultations with indigenous groups in Chile. Due to SQM's international presence, the deal needed approvals from several countries.

This week, a senior Codelco spokesperson said that both conditions should be met by the end of September.

Currently, the U.S. company Albemarle and Santiago-based SQM are the only lithium miner in Chile. Chile is the second largest producer of this metal. SQM’s current lithium production quota is set to expire by the end of 2020. Fabian Cambero, Daina Beth Simao and Paul Simao edited the article.

(source: Reuters)