Copper and Lithium, Chile’s Crown Jewels
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One in every four tons of the world’s copper supply comes from Chile, a country with mining in its DNA, and one that also has the world’s largest reserves of lithium, often dubbed “white gold,” a coveted mineral that will be key in the coming years with the rise of electric mobility.
|The history of Chile and its economy are closely linked to mining, first with the buoyant salt industry at the beginning of the last century and later with the exploitation of copper.|
Essential in the transmission of energy, copper has become a cornerstone of the Chilean economy and last year amounted to almost 50 percent of its exports.
Chile’s hegemony is not at risk for the next few years thanks to the large copper reserves the South American country enjoys and the continued demand for the metal.
“Chile has a third of the world’s reserves, we can continue to operate at the same speed for at least thirty years, plus everything that can be added with the development of the deposits, and the demand for copper looks pretty healthy worldwide,” Jorge Cantallops, director of Studies and Public Policies for the Chilean Copper Commission (Cochilco), told EFE.
Excessive dependence on copper is dangerous for the Chilean economy as it is exposed to fluctuations in international markets. Authorities have insisted for years on the need to diversify the productive matrix, but it is not easy to shed a pervasive mining heritage.
Last year Chile produced a whopping 5.8 million tons of copper, a record figure, boosted by the fact both international and national companies work in a hyper-specialized way using cutting edge technology.
The world’s largest copper producer is the state-owned company Codelco and in the private sector, Chile’s Antofagasta Minerals and others with foreign capital such as Escondida or Collahuasi stand out.
Juan Carlos Guajardo, executive director of the consulting firm Plusmining told EFE that all these companies use “absolutely mature, proven and reliable” technologies, but until recently they had left innovation on the backburner.
The high levels of investment and risk in the industry traditionally meant mining companies left the development of technological innovations in the hands of companies that specialized in mining services, but this has begun to change.
“The mining companies themselves have realized that they need to accelerate their innovation process and look for formulas to accelerate technological innovation options,” Guajardo continued.
Some companies have strengthened their areas of innovation, others seek financing in investment funds or strengthen ties with their suppliers to work on innovative projects.
In a mining landscape dominated by copper, in recent years, lithium, a mineral used to make batteries for phones, laptops and electric vehicles, has started to emerge as a key resource.
The Salar de Atacama, in the north of the country, has the world’s largest lithium reserves, but Chile is not the main global producer of it.
In 2018 Australia surpassed Chile for the first time, with some 51,000 metric tons compared to 16,000 in the South American country.
According to Guajardo, this is due to Chilean regulation, which declared lithium a strategic mineral and limited the exploitation rights to two companies: the Chilean SQM and the American Albemarle.
This has caused the Chilean lithium industry to lose competitiveness against countries such as Australia or Argentina, which have decidedly opted for its exploitation.
Cantallops, of Cochilco, points out that, compared to copper, lithium production is almost marginal.
He also said that experts could not agree on whether lithium batteries will be the technology of the future in terms of energy storage.
The founder of the consulting firm Plusmining agreed that lithium will have “a window” in which it will be the protagonist, but it has more risk of being surpassed by other technologies.
“Copper seems to have a clearer track, there is more certainty that it will continue to grow regardless of the path that is consolidated within electromobility because, after all, all roads lead to greater consumption of electrical energy and in that field, copper is fundamental, “ he said.
One of the main challenges of mining is to reduce the impact of its activity on the environment, an issue that has become a key concern due to the increased demands of the authorities and the pressure of civil society groups.
The major problem of copper mines are mine dumps, waste areas that are the product of mineral concentration processes.
In the case of lithium, its extraction requires a large consumption of water in an area that suffers from a deep water shortage and threatens the salt ecosystem.
Matias Asun, general director of Greenpeace Chile, believes that mining is a “protected activity” under Chilean law, which allows it to operate with “tolerance limits that other productive sectors do not have.”
“The image of mining as a traditional activity that could bring progress, today is perceived as an activity that hopefully does not happen near my house,” the activist told EFE.
Source: Latin American Herald Tribune
Post available in: English