Other Articles
The Lithium Triangle

Buried in three South American salt flats are the largest proven reserves of lithium on the planet. The metal is used in the manufacture of long-life batteries and is indispensible in the era of laptops, cell phones and electric automobiles.

Graphic: © iStockPhoto.com/pop_jop

 

 

Together, the salt flats of Uyuni in Bolivia, Atacama in Chile and Hombre Muerto in Argentina account for at least 75 percent of the world’s known reserves of lithium. They comprise what’s known as the “lithium triangle,” a desert expanse in the high Andes that today provides the raw material that moves the world of information technology and communications.

“Global communication is possible because of the lithium batteries in our laptops and cellular telephones,” claims an ad from Canadian mining company FMC. But that isn’t all: it has a bright future as a crucial ingredient in high-performance batteries for electric vehicles.

Nevertheless, the current lithium business is under discussion in South American producer countries so as to which is the best exploitation model to follow. The debate ranges from the more ideological view that contends that lithium should be treated as a strategic mineral and should therefore remain under the strict control of national states, to the more pragmatic one that holds that, with the rapid changes in technology, lithium’s moment is today and shouldn’t be allowed to pass.

“Lithium’s time horizon of intense use will last until 2035 or 2045,” wrote the Peruvian sociologist and analyst Monica Bruckmann in a document for the Union of South American Nations.

Speaking for SQM, the Chilean company that’s the international leader in extracting lithium, its commercial manager Felipe Smith thinks that “there’s no justification for holding onto the metal to face an uncertain future” and “not for its potential use in nuclear fusion energy, which is far from being a reality.”

Bolivia, Chile and Argentina are a showcase of diversity in respect to the way to handle the business.

Bolivia defends its tight-fisted state control of every stage of the industrialization process, which it is seeking to top off by building lithium-ion battery manufacturing plants which will export batteries to the world. It sees lithium as a strategic resource which it should capitalize on by adding value instead of exporting it as raw material or an industrial input. The strategy is summed up in the slogan of the Mining Commission of Bolivia (Comibol): “produce, industrialize and export, with sovereignty intact.”

So far, the country has signed letters of understanding with Brazil, Iran and the Low Countries and some Asian companies. But, it still hasn’t begun to produce lithium carbonate on an industrial scale. In January 2013, it opened a pilot production plant, and National Evaporite Resources Management told Latin Trade it expects that this year it will call for bids for the design of the industrial plant.

Bolivia is supposed to have the largest lithium reserves in the world in the Uyuni salt flats, but the country still hasn’t certified them. As Eclac Hugo Altomonte put it,  “Lithium is for Bolivia what copper is for Chile.”

 

Chile exploits the present

As Bolivia works to move forward on its state production project, Chile has taken the lead as the world’s main exporter of lithium carbonate. There, the state also sees the metal as a strategic resource, but it has given permission to two firms, Chilean company SQM and US Rockwood Lithium, to mine it. “Anyone may have a mine property and exploit all the minerals that are there, but in the case of lithium, you need permission from the state,” explained Felipe Smith, SQM’s manager for iodine, lithium and industrial chemicals.

In 2013, the two companies operating in Chile produced about 60,000 tons of lithium carbonate equivalent, out of total world production estimated by the British consultant Roskill at 150,000 tons. SQM extracts 60 percent of Chile’s production from the Atacama Salt Flats, and this makes it one of the big international players in the lithium market. It shares control of the global market with the Australian firm Talison Lithium, with each having about 30 percent.

And, finally, the third South American producer, Argentina, does not have a special regulation on lithium nor has it been declared a strategic mineral. Companies extracting lithium in the country operate under the Argentine general mining laws. FMC and the Australian company Talison Lithium operate through their own affiliates; there are also joint ventures, such as that of Toyota Tsusho with Orocobre (a company that’s quoted in Sydney and Toronto), and some international companies like Mitsubishi and LG holding minority positions in producer companies.

This situation could change because there are bills circulating in the Argentine Congress that call for declaring lithium a strategic mineral, with limits for its extraction.

It remains to be seen whether in the next few years Bolivia and Argentina seize the moment, or if the delays in their projects cause them to miss the boat. As the SQM executive put it, “The main challenges are political and regulatory.”

Élida Bustos reported from Buenos Aires.

Subscribe to latin trade magazine
Click here to begin a subscription for Latin Trade magazine, available both in print and online.
Subscribe to lt.com
Click here to begin an online subscription to LT.com, with its extensive ranking, indices, and market intelligence on Latin America.
Subscribe to free Newsletter
Subscribe here to our free newsletter – getting the latest business headlines from Latin America in your inbox every day.
LOGIN
FOR READ MORE LOGIN
LOGIN
LOGIN
Forgot your password
SEND
READ MORE
Aenean sollicitudin, lorem quis bibendum auctor, nisi elit consequat ipsum, nec sagittis sem nibh id elit. Duis sed odio sit amet nibh vulputate cursus a sit amet mauris. Morbi accumsan ipsum velit. Nam nec tellus a odio tincidunt auctor a ornare odio. Sed non mauris vitae erat consequat auctor eu in elit.Aenean sollicitudin, lorem quis bibendum auctor, nisi elit consequat ipsum, nec sagittis sem nibh id elit. Duis sed odio sit amet nibh vulputate cursus a sit amet mauris. Morbi accumsan ipsum velit. Nam nec tellus a odio tincidunt auctor a ornare odio. Sed non mauris vitae erat consequat auctor eu in elit.
Read the current issue of Latin Trade Magazine

Access Denied

Please log in or register

Read Our Latest Issue

FOLLOW US