Chile has for many years had a huge market share of world copper production. However, copper is not the only natural resource that Chile has been blessed with an abundance of; The mineral rich country also dominates the world market in lithium (see figure below), accounting for as much as 58% of current world reserves according to the US Geological Survey.
Source: US Geological Survey.
Source: Center for Entrepreneurship & Technology, University of California. Estimates are most conservative, assuming no high fuel price or subsidised purchases.
There is, therefore, a huge potential for Chilean government and industry to capitalise on this emerging market. Speaking on the potential for lithium to be developed in Chile, the Undersecretary of Mining Pablo Wagner has commented that, ” we have 1,500 years of lithium, the best prices and logistic capacity to be industry leaders.” However, he was also quick to warn that, “it might be that other countries will advance faster than us.” Urgency is the order of the day and there are certain complications that may hinder the rapid development. For example, under General Pinochet’s regime in the 1990s lithium was classified as a ‘strategic’ metal because it can be used in the process of nuclear fission and so opening up the resource to further mining and development may be a problem that ultimately needs legislation to circumvent. Nevertheless, there appears to be a sentiment in some quarters in Chile urging for a push to modernisation. Recently, Senator Carlos Cantero suggested that, “… there is a need to create a Chilean Insitute for Lithium, that is to say, a space where we can develop this industry further.”
Do you think the electric vehicle market will boom over the next twenty years? Or is lithium just a flash in the pan?