March 6, 2019 / 6:40 PM / 3 months ago

Chile's Codelco continues lithium push despite slow progress -minister

TORONTO, March 6 (Reuters) - Chilean state-run miner Codelco will continue to develop its lithium assets, including committing $57 million for further exploration, Chile’s mining minister told Reuters, even as progress has stagnated at its flagship projects.

The company, already the world’s largest copper producer, has tried unsuccessfully in recent years to attract a partner to develop its lithium projects in Chile, stifled by legal and regulatory hurdles.

Lithium, a highly-sought after metal used to make electric vehicle batteries, remains a priority for not only Codelco, but also for the country’s government under President Sebastian Pinera, Mining Minister Baldo Prokurica said in an interview on the sidelines of the Prospectors and Developers Association of Canada conference in Toronto.

“The Pinera government is looking to ensure that both lithium and other battery metals are being exploited,” Prokurica said late on Tuesday. “If we have this wealth and this mineral, we obviously want to use it.”

Prokurica’s comments follow a Reuters report earlier this week citing several high-level sources at Codelco who said interest in lithium is fading amid competing priorities at the state-owned miner.

Both Prokurica and Codelco’s leadership serve at the pleasure of center-right Pinera, who since taking office in 2018 has focused Codelco on a sweeping, $39 billion, 10-year overhaul of its aging mines.

“Codelco is a huge corporation. It’s possible to focus on copper without losing focus on lithium,” Prokurica said.

The fate of Codelco's flagship lithium projects, once thought a shoo-in to boost global supply and lower prices, could impact the supply chain for the vital battery mineral amid an expected $300 billion surge in spending on electric vehicle technology over the next five to 10 years. tmsnrt.rs/2Azl09N

The Reuters review found that regulatory hurdles and lawsuits had slowed Codelco’s progress in developing the projects to a crawl, and had left the state miner unable to secure a partner at either its Maricunga or Pedernales salt flats.

Prokurica said that the company had nonetheless committed $57 million for further exploration of its lithium assets, while adding that state-run mining company Enami was also pushing to develop its own, smaller-scale lithium projects.

But the minister raised questions about how Codelco would manage its holdings going forward.

“We don’t know exactly if Codelco can do it directly, they could go through a third party, or through a private company, or might go over to Enami,” Prokurica said.

Codelco turns over all its profits to state coffers, and its performance is closely watched by Chileans of all stripes.

One top Codelco official told Reuters the lithium business was simply “too marginal” compared with copper to warrant substantial investment given tight budget constraints.

Chile’s total lithium exports in 2017 were $800 million, less than one-tenth of copper revenues at Codelco, which hit $11.6 billion the same year.

Reporting by Nichola Saminather; Writing by Dave Sherwood; Editing by Ernest Scheyder and Marguerita Choy

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