(Reuters) The Blanco lithium project expects to begin construction at the beginning of 2020 in northern Chile, once its environmental permit is approved and defines with the government the scheme under which it will exploit the ore, classified as a strategic state reserve .
The initiative, which envisages an investment of 527 million dollars, began this month the processing of its environmental permit, which is expected to be approved by the end of next year.
The executive president of Minera Salar Blanco (MSB), Cristóbal García-Huidobro, explained that the company is in talks with authorities to establish the way in which the State would allow its operation, considering that it already has the permission of the nuclear power regulator.
"We are working very closely with the Ministry of Mining in order to be able to define what will be the best structure to use," the executive told Reuters.
"There is more than one option contemplated in the Constitution and the idea is to define that optimal structure," he added.
Located about 740 kilometers northeast of the capital and 3,756 meters above sea level, the Maricunga salt flat, where the Blanco project is located, is one of the desired deposits of the lithium triangle, which concentrates the largest mineral reserves among Argentina, Bolivia and Chile.
Lithium is key to making batteries used in products ranging from mobile devices to electric vehicles.
MSB - which combines the Australian Lithium Power International and the Canadian Bearing Lithium with local capital -, signed a contract with the German company GEA earlier this year for the construction of its lithium carbonate plant.
The executive explained that the mining company has the necessary water rights for the entire project and that in its study it included models of interaction of the brine with fresh water, amid concerns about the scarce resource in the country.
Blanco plans to extract 209 liters per second of well brine north of the salar to produce 20,000 tons of lithium carbonate per year and 58,000 tons of potassium chloride. EXPANSION POTENTIAL
In Maricunga, MSB has identified resources for 2.15 million tons of lithium carbonate, considering only a depth of 200 meters, while the salar has more than 600 meters, he said.
"We have resources that probably more than triple the size of the project, therefore, the future growth capabilities of this project will depend on how the market develops," García-Huidobro said.
In July, the firm withdrew a lawsuit against Chile over a dispute against state copper company Codelco for the rights to develop operations in the salar.
García-Huidobro attributed the decision to the good spirit of the center-right government of Sebastián Piñera to encourage investments aimed at supporting the growth of the economy of Chile, the world's largest copper producer.
Blanco "is one of the few projects that could be inaugurated under this Government," he stressed.
On financing, he said that although it has not been defined, options will be evaluated with financial entities, but also "includes the possible entry of a strategic partner in the future."
The company talks with the Chinese Sichuam Fulin Industrial Group, which outlines the construction of a lithium cathode material plant in Chile with an investment of 100 million dollars in its first phase.
"The talks between Fulin and MSB point to both Fulin entering the ownership of MSB, and that MSB can participate as a developer and operator of this future plant," he said.
Fulin, along with other firms, was favored in a state tender to develop investments linked to lithium as part of an agreement with local producers SQM and Albemarle, in order to offer a preferential price to the value-added companies that operate in the region. country.
García-Huidobro stressed that, considering that the largest automotive companies have plants in Latin America, it now makes sense to develop batteries or cathode materials in the region.
LPI Price at posting:
28.0¢ Sentiment: Buy Disclosure: Held
