Russia eyes the lithium market
Russia plans to expand in lithium sector in Chile, that will take place through the participation of the country’s nuclear monopoly Rosatom in lithium production and processing in Chile already this year.
Several weeks ago the Chilean government began the receipt of applications for the production and processing of lithium within the country from foreign investors, including Rosatom. According to state plans, the selected companies will receive contracts for the production of lithium carbonate in the country and will be able to purchase lithium carbonate from Rockwood Lithium Ltd., (a US company, which earlier entered into an agreement with the Chilean state agency Corfo on the production of lithium) at reduced prices.
The duration of the contracts will vary in the range of 25-27 years.
In the case of Rosatom, the Russian company is interested both in the production and processing of lithium in Chile. In regard to the production, there is a possibility that it will be carried out by Rosatom in cooperation with the Chilean state-owned company Codelco. The latter, earlier this year, announced its plans for a search of a partner for the production of lithium at two salt marshes in the Atacama region (Northern Chile).
In addition to the production of raw materials, Rosatom’s sphere of interests in Chile also includes the production of lithium-based products, such as cathodes, batteries and others.
In the meantime, the interest of Rosatom and other global energy and mining majors in the Chilean lithium industry could be mainly explained by the country’s record reserves of the metal, which are equivalent to 53% of global reserves, or 7.5 million tonnes.
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Currently the Chilean government considers lithium carbonate as a strategic asset, looking for experienced foreign partners for the implementation of projects in the field of its production and processing.
At present the majority of Chilean lithium production is exported. In 2016, the volume of exports amounted to 79,500 tonnes of lithium carbonate, that were priced at US$589 million. Currently Chile holds 40% of the global market of lithium carbonate. Analysts believe that the demand for lithium will grow by 2-4 times during the next five years: from the 189,000 tonnes in 2016 to 400,000-600,000 tonnes by 2021. That will be mostly ensured by the predicted doubling of sales of batteries for smartphones and electric cars.
In the case of electric cars, last year their global sales grew by 86% compared to 2015 and amounted to 774,000 units. The growth will be driven by both developed and emerging nations, such as China. In the case of China, the government of the country has recently set a goal to bring up to 5 million electric cars to the country’s roads before the end of 2020.
At the same time the growth of production of electric cars has also been announced by some global automakers and technology giants. For example, earlier this year Tesla and Volkswagen announced plans to produce more than 1 million electric vehicles annually by 2020-2025, while German Daimler intends to spend €10 billion on the production of electric cars in the next several years.
Eugene Gerden is an international free-lance writer, based in St. Petersburg, who specializes on writing in the field of mining, metals and rare earth metals. ... <Read more about Eugene Gerden>