Chile lithium expansion cleared by little-known nuclear agency

A little-known nuclear agency signed off on a proposal that clears the way for a major lithium expansion over the coming decades in Chile, the nation with the biggest reserves.

The Chilean Nuclear Energy Commission, or CCHEN by its Spanish initials, approved a request by Codelco for extraction at the Atacama salt flat operation — currently controlled by SQM — from 2031 to 2060.

To be sure, that time-frame is a long way off in a market currently characterized by strong demand and even stronger supply. But it allows a partnership between Codelco and SQM to continue ramping up supply of the battery metal from about 200,000 metric tons of lithium carbonate equivalent a year to as much as 330,000 tons. The venture is betting on low expenses to keep expanding as higher cost producers cut back.

Under the partnership arrangement, SQM would relinquish a majority stake in its prized assets to Codelco in exchange for three more decades of operations. The planned tie-up is encountering growing political opposition in Chile as its approval process gets caught up in the country’s election cycle. CCHEN’s clearance is one less obstacle to nailing down the transaction during the current administration.

CCHEN authorizes lithium quotas and exports in a throwback to a 1979 decision to declare lithium “strategic” because it was thought to be a key element in nuclear processes.

(By James Attwood)