THE LAW IS CHANGING:
Chile Government Plans Tender To Attract New Lithium Producers - Paper
DOW JONES NEWSWIRES
SANTIAGO -(Dow Jones)- The Chilean government on Wednesday launched a tender process to open lithium production to new producers, evening newspaper La Segunda reported, citing Mining Undersecretary Pablo Wagner.
Only two companies, Sociedad Quimica y Minera de Chile SA (SQM, SQM-B.SN) and Sociedad Chilena del Litio, a subsidiary of Rockwood Holdings Inc. (ROC), currently produce lithium in Chile.
As Chilean laws had classified the mineral as "strategic," no new lithium concessions have been issued since 1982, according to Wagner.
To maintain Chile's spot as the world's leading lithium producer, the government will offer Special Lithium Operations Contracts, or CEOLs by their Spanish abbreviation, that don't require any changes to existing mining laws.
The government expects to have the tender rules for these contracts ready by midyear, La Segunda reported, citing Wagner.
A CEOL will give a mining company the right to produce up to 100,000 metric tons of lithium a year, paying the government a fee of 7% of annual sales, the newspaper reported.
Chilean Mining Minister Hernan de Solminihac hasn't been part of the tender process as his brother Patricio de Solminihac is a high-level executive at mining company SQM.
Chile has 25% of the world's reserves of lithium, which is used to make batteries for electronic devices.
-By Carolina Pica, Dow Jones Newswires; 56-2-715-8919; carolina.pica@ dowjones.com