SANTIAGO, Jan 25 (Reuters) - Chile is pushing forward with new policies to develop its vast lithium reserves, the government said on Monday, at a time when prices for the battery ingredient have been rising rapidly.
One of the government’s first moves in the mostly private sector industry would be a call to tender the exploration of two salt flats owned by state-run Codelco, the world’s biggest copper producer.
Lithium is an important ingredient in rechargeable batteries and is used in electric cars. Annual demand for lithium was forecast to more than double by 2020 from 95,000 tonnes now.
Most lithium is produced in Australia and Chile, with the bulk of the world’s reserves straddling huge salt flats in Chile, Bolivia and Argentina.
Companies including U.S. electric vehicle maker Tesla Motors Inc have been reported visiting Chile as the race to secure supplies of the chemical heats up.
Major global lithium producers include Chile’s SQM , U.S. supplier Albemarle Corp and chemicals firm FMC Corporation. Starting last Oct. 1, FMC said prices would increase 15 percent globally for its lithium products.
Codelco had already received letters of intention for its planned tender to evaluate and explore the “relatively small” lithium reserves in Maricunga and Pedernales in the Atacama desert, the company’s chairman Oscar Landerretche told reporters.
“Many international companies are interested. It will be an open process,” Landerretche said on the sidelines of an event to announce the new policy. Codelco has not yet published more details of the tender.
The government would also establish a new regulatory framework for lithium exploration “with clear rules” that would be sustainable and involve local communities, President Michelle Bachelet said at the same event.
Lithium is also used for solar energy storage and improving knowledge and investment in that area would be another aim of the new policy, said Eduardo Bitran, head of government development agency Corfo. In sun-baked Chile, industry is increasingly looking to solar power to help mitigate high energy prices. (Reporting by Rosalba O‘Brien; editing by Grant McCool)