Is Chile rich in lithium?

April 23, 2023

Is Chile rich in lithium?

Chile has been a major producer of lithium for decades, and its production plays a crucial role in the global economy.

The World’s Second Biggest Producer Of Lithium, Chile, Shocks The Market As President Boric Unveils A Strategy To Nationalize The Entire Lithium Industry.

Lithium demand, expected to increase by a 5x mulitople by 2030. Moreover, a key component of lithium-ion batteries used in electric vehicles.

Although it’s abundant as a resource, it’s about investing in the right projects and quickly!

Chilean President Gabriel Boric said “Future lithium contracts would only become issued as public-private partnerships with state control”!

In addition, the strategy was to “to boost its economy and protect its environment.”.

Boric with US Secretary of State Antony Blinken in 2022
U.S. Department of State from United States – Secretary Blinken Meets with Chilean President Boric, Gabriel Boric – Wikipedia

But the overwhelming takeaway here for me is the continuation of an accelerated scramble for key commodities and nationalisation of key industries related to the energy transition.

Lithium paraffin.jpg — Lithium in a glass of water

Lithium production in Chile dates back to the early 20th century when the country became the first in the world to develop commercial lithium production. The first lithium mine in Chile became established in 1916, and by the 1950s, Chile was the largest lithium producer in the world. Lithium production in Chile centers around the Salar de Atacama. Moreover, a vast salt flat located in the northern part of the country. Thus, the Salar de Atacama is home to one of the world’s largest lithium reserves and accounts for more than 40% of global lithium production.

The Salar de Atacama is a unique location for lithium production because of its high-altitude location and arid climate. The region receives very little rainfall, and the water that does fall evaporates quickly, leaving behind a layer of salt that is rich in lithium. The lithium is extracted from the salt flats by pumping brine to the surface and then evaporating the water, leaving behind the lithium carbonate.

alt1 — Satellite images of the Salar del Hombre Muerto, Argentina (left), and Uyuni, Bolivia (right), salt flats that are rich in lithium. The lithium-rich brine is concentrated by pumping it into solar evaporation ponds (visible in the left image).

The importance of lithium in the global economy cannot be overstated. Lithium is a key component in the production of batteries used in electric vehicles, smartphones, laptops, and other electronic devices. With the growing demand for these products, the demand for lithium has also increased significantly. According to the International Energy Agency, the demand for lithium is expected to triple by 2025, driven largely by the increasing adoption of electric vehicles.

alt2 — Satellite images of the Salar del Hombre Muerto, Argentina (left), and Uyuni, Bolivia (right), salt flats that are rich in lithium. The lithium-rich brine is concentrated by pumping it into solar evaporation ponds (visible in the left image).

The production of lithium has also become an important source of revenue for Chile, accounting for approximately 8% of the country’s exports. The Chilean government has implemented policies to encourage foreign investment in the country’s lithium industry, including the creation of a lithium production quota system, which aims to increase production while ensuring that the resource is used sustainably.

However, the production of lithium in Chile has also been controversial. Furthermore, the Salar de Atacama located in a fragile ecosystem. And the extraction of lithium has become criticized for its impact on the environment. The extraction process requires large amounts of water, and there are concerns that the pumping of brine from the salt flats could cause damage to the local ecosystem. There are also concerns about the impact of lithium mining on the indigenous communities that live in the region.

In conclusion, the history of lithium production in Chile is long and storied, with the country playing a crucial role in the global economy. Lithium, a vital component in the production of batteries used in electronic devices and electric vehicles.

Furthermore, its demand only expected to grow in the coming years. While the production of lithium has brought economic benefits to Chile, it has also been the subject of controversy, with concerns about its impact on the environment and local communities. However, clear to all that the sustainable production of lithium will become crucial in ensuring its continued role in the global economy.

Lastly, now the country looks to nationalize its vast mineral reserves!