Lithium Power International Ltd (fka LTHHF)

[Dr_Vonschellan]

Salt Flats for Sale...
by Victor Cofre https://www.latercera.com/pulso/noticia/salares-a-la-venta/Y5GUUTSLQ5BTJN5YKME3OWMQLM/

Google English translation follows:
Salt Flats for Sale...
by Victor Cofre
The alliance between the international Talison company and the Chilean Vecchiola family is trying to sell its Siete Salares project, which has assets for almost 40,000 hectares in several locations. Two of them are the most relevant: La Isla and Aguilar. The sale is being developed by Asset Chile and has aroused international interest: there are more than 5 interested parties and they (Asset Chile) intend to seal the agreement before the end of the year.

The NLP (National Lithium Policy) turned 6 months old on October 20. In April, President Gabriel Boric announced a policy that includes state prominence, the entry of Codelco into the Atacama salt flats and the development of other salt flats in public-private alliances. A few days later, one of the several actors who have their eyes and pockets on the lithium industry made a decision that was awaiting that definition: the sale of a long-standing project that has the ambitious name of Siete Salares. .

In April, the owners of that project entrusted selling the Siete Salares to the investment bank Asset Chile, directed by Georges de Bourguignon, a banker who knows the mining industry and who was a director at SQM elected by the Chinese company Tianqi. From that date onwards, the process has progressed slowly, but at a steady pace. The asset was presented and promoted among around twenty possible interested parties and the process is in the final part, with at least five candidates. All are international, none are Chilean. And some Chinese companies among them.

Asset Chile does not only work on this: there is also the Bofill Mir Abogados Studio. One of its partners, Pablo Mir, is a specialist in mining issues and has been working on the same project for years: he was the one who processed an environmental impact study almost a decade ago to carry out explorations on the holdings linked to the project. What is for sale (like Lithium Power International, with assets in the Maricunga salt flats and which Codelco agreed to buy for US$ 244 million) is the company that owns the project: Salares de Atacama Sociedad Contractual Minera (SCM). That company is controlled in equal parts by two partners. The original shareholder of the project is San Antonio SCM, a firm controlled by the Vecchiola family and where the former president of Codelco, the former minister Juan Villarzú and the lawyer Alejandro Moreno Prohens participate as minority shareholders.

The other 50% is in the hands of a giant: Talison, an alliance between the Chinese company Tianqi (51%) and the American Albemarle (49%). The two multinationals are in Chile, with operations in the lithium industry. Albemarle is one of the participants in the Atacama salt flat and Tianqi is a relevant shareholder of SQM, the largest producer of lithium in Chile and the world, also in the largest saline deposit in the world. Talison has another relevant asset: they own Greenbushes, the largest lithium deposit in Australia, where lithium is extracted from rock, not from salt flats (brine), as in Chile. Talison bought the stake in the company in 2010 from a Canadian junior that was originally associated with the Vecchiolas, who own a comprehensive mining services group.

Talison and the Vecchiolas agree to the sale. Thus, Asset offers 100% of Salares de Atacama to interested parties. The Vecchiolas had moved forward with selling their 50% stake years ago to Wealth Minerals, but that effort ended without an agreement.

The Seven Salt Flats

The company for sale has mining properties in seven deposits in the Antofagasta and Atacama regions. In total, their rights add up to 39,400 hectares, as previously detailed: La Isla (16,500 hectares); Agua Amarga (3,100ha); Parinas (5,400ha); Grande (4,000ha); Aguilar (8,800ha); Piedra Parada (1,500ha) and Maricunga (104ha). The very minor presence in the latter two salares makes them of low commercial value. In four salt flats, Salares de Atacama is the sole owner and in a fifth it has 95% of the surface. But two of them are the most attractive deposits: Aguilar and La Isla.

La Isla is the project with the best “grade” of the lithium mineral: it has a maximum lithium of 1,150 milligrams per liter, according to government studies from a decade ago. In comparison, the Atacama salt flat, the jewel in the crown, exceeds 2,000 mg/l, and in Maricunga 1,050 were reported. Aguilar had a maximum of 375 mg/l.

A transfer of this type has uncertainties that potential investors must weigh. The biggest is the definition of the NLP (National Lithium Policy): the government must define which salt flats will be used for exploitation and which basins (it has promised 30%) will be reserved for environmental conservation. And it has defined that in strategic developments the State will preserve control of projects that arise in public-private alliances. But that is also progress: before April there were no doors open for the entry of private individuals.

The second is ENAMI's attempt to obtain exclusive use of those salt flats: in 2022, the state mining company requested a Special Lithium Operation Contract (CEOL) for a set of five salt flats: Aguilar, Infieles, La Isla, Las Parinas and Grande. But its lack of resources requires a partnership with private companies to develop a project. And that, sellers believe, could be an incentive in an industry eager to buy undeveloped lithium projects around the world.