....an interview with Daniel Jimenez:
https://ellibero.cl/actualidad/daniel-jimenez-experto-en-litio-chile-perdio-la-oportunidad-de-este-boom/Daniel Jiménez, lithium expert: "Chilelost the opportunity of this boom"
Faced with the idea of creating a“lithium cartel” that the chancelleries of Chile, Argentina and Bolivia arestudying, the specialist explains: “It is an outdated practice that has notworked well anywhere.”
by Magdalena Olea
28 October, 2022
It generated controversy in Chile when-according to what was expressed by the undersecretary of InternationalEconomic Relations José Miguel Ahumada- , the idea of creating a kind of"lithium cartel" between Chile, Argentina and Bolivia was known, withthe aim of establishing a selling price for the ore.
This is a project that would be goingaround from Argentina, so there are already those who have warned about therisks that a strategy of this type would generate.
In addition, this week the Governmentaccepted for processing a request from Codelco, which could become the onlyfirm to exploit lithium in the Maricunga salt flat .
In a new Special Mirada Líbero , thepartner of iLiMarkets -consultant in the world of lithium-, director of GalanLithium -an Australian company with a lithium project in Argentina-, formercommercial vice president of SQM, and lithium consultant for national andforeign companies Daniel Jiménez, talked about the implications of these ideas.
"It's an outdated practice that hasn'tworked well anywhere"
“Taking the edge of a cartel with the aimof setting or maintaining high prices, beyond the fact that it is an outdatedpractice and that it has not worked well anywhere, we must consider that Chiletoday produces 30% of the lithium that is extracted in the world, but given theprojections that there are in 2030 the country is going to do 13%”, explainsthe former commercial vice president of SQM.
«Argentina today is 5%, Bolivia is zero. Sowe are talking about neighboring actors who are boys today. By 2030 Boliviawill probably remain small and Argentina will grow a lot, probably the size ofChile in terms of production. But this cartel, in the best of cases, couldrepresent 25% or 30% of the world's supply ", He maintains.
He adds that “there are actors who are verygreat. Australia today is and will continue to be the largest producer in theworld . The ability to influence prices decisively with a cartel is low . Onthe other hand, in this association of countries, the productive know-how is inChile, so I do not see a great benefit from an association, for Chile therewill not be much learning ”.
“Chile and Bolivia are the only ones thathave any restrictions regarding lithium”
Daniel Jiménez also says that “ lithium isan abundant product in the world, let's not fool ourselves. Indeed, the Salarde Atacama, as well as Greenbushes in Australia, are two extraordinaryresources, with a different level of production costs compared to other averageresources in the world, but they have a limited production capacity. At currentprices, any lithium resource, no matter how bad, is a good project. Then theoffer will come."
The expert explains the fact that in thecountry lithium is declared of national interest and not granted . “This is atheme that comes from the Cold War (…). Today, of the relevant countries withlithium production in the world, Chile and Bolivia are the only ones that haveany restrictions regarding lithium.”
From the economic point of view, he adds:«The happy accounts that are drawn today must be drawn well. In terms oflithium revenue sales, assuming certain reasonable prices, copper sales inChile will be 10 times higher in 2030 than lithium , that's what we're talkingabout. It is a small industry and it will have a life cycle. The technologiesdo not have a life of more than 20 years and lithium is already more than 20years old, and substitutes are being worked on.”
And he deepens: «Recycling is coming andall the lithium that we are extracting today is going to be recycled, it willbe very easy to collect. We do not have a resource that is consumed like oil,it is a resource that, once extracted, will have several lives. Lithium shouldnever have been considered strategic in Chile."
“In Chile there has been no incentive forlithium exploration”
Regarding Codelco, which could become theonly company to exploit lithium in the Maricunga salt flat, the expert affirmsthat "it is, apart from the Atacama salt flat, the only company that has aCEOL, a special contract permit for the operation of lithium in Chile, whichmeans that it can explore and exploit . And that is the big problem that Chilehas. There has been no incentive for lithium exploration, because if youdiscover lithium, it does not belong to the owner of the mining concession, andyou have to try to get a CEOL.”
The case of the trans-Andean country isdifferent: «In Argentina today there are 30 lithium projects, and it willproduce more lithium than Chile in seven more years , because this has beenconsidered one more mineral, so there are incentives for exploration,investment and companies willing to take a lot of risk... in Chile that doesn'texist," says Jiménez.
“There is an important ideologicalcomponent in this decision”
The lithium consultant adds: «Codelco is ahuge company, but with a risk profile very different from that of a junior,which is willing to lose everything and invest 10 million dollars... In largecompanies, speeds, development it's much slower."
“There is an important ideologicalcomponent in this decision. I would look at what is happening in the world,with Australia, which became the largest producer of lithium, passed over us,trampled on us, simply because it allowed that industry to develop », heemphasizes.
Thus, he maintains: "Chile lost theopportunity of this boom, because even if all things were perfect today, alithium project takes between eight and ten years to be in production."
“Chile has to release lithium, politicscannot continue to be obsessed with the fact that it is strategic, because itis not . And even if it were, we have it buried and we can't get value out ofit », he says.
“What the country should do -he raises- isto facilitate electromobility and stationary energy storage with batteries.There is this desire to make batteries, but you are not going to producebatteries in Chile to meet the demand in Europe or the United States, becauseyou have to bring 90% of the raw materials in Asia.
A National Lithium Company with “clearobjectives”
Regarding the Government's idea ofcreating a National Lithium Company , he points out: "Any objective thathas to do with the development of science and applied science is going to be ofvalue, whether in lithium extraction, refining and downstream technologies aswell. , there I see the possibility that the State contributes ».
But he specifies: «The State, in no part ofthe world, has been very efficient in the production of goods, and the idea ofa National Lithium Company, which is not very well defined, must have certainclear objectives, and not go for the side of being a lithium producer.”
