The “value added” craze has been sweeping the mining world. With governments from Zimbabwe to Indonesia calling for miners to upgrade copper, nickel, aluminum and platinum in-country — rather than exporting lower-value mineral concentrates.
And this week, the world’s second-largest lithium nation jumped on the bandwagon. Calling for increased processing of lithium in the country, and offering financial incentives for those who help.
The place is Chile. Where the head of government development agency Corfo told Reuters Tuesday he wants to see the country’s vast lithium reserves converted into end products close to home.
Corfo head Eduardo Bitran said Chile will launch a tender this April for firms to propose value-added projects in lithium. Potentially including manufacture of lithium ion batteries and cathode.
That would be a big shift for Chile — which currently exports the majority of its lithium to other nations where manufacturing takes place.
Corfo’s Bitran noted the program has already received strong interest. Saying meetings have taken place with two Chinese firms and a Korean company to advance potential projects.
He also said developers of advanced projects will get preferential access to Chile’s mined lithium supply. Noting that lithium prices for in-country manufacturers would be set lower than prices for foreign customers. Related: The Rebound Is Here: Megaprojects Back On The Table
That’s good news for battery makers. But potentially a negative for lithium producers — who might be forced to sell product at lower prices in order to support the government’s development plans.
Such restrictions on the mining industry are increasingly becoming a global issue. Like in Indonesia, where miners are paying hundreds of millions of dollars to build smelters — or face cuts to their output.
Chile is a higher-profile mining nation — and a rise in the value-added movement here could encourage more resource nationalism worldwide. Watch for results of the Chilean project tender after April.
Here’s to a homemade solution.
By Dave Forest
More Top Reads From Oilprice.com:
- Oil Tanks After EIA Reports Surprise Crude, Gasoline Build
- 2017 Another Year Of Excessive Volatility For Oil Prices
- OPEC Commitments Push Iraq Towards Oil Export Deal With Kurds