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Great Southern Copper expands into lithium in Chile

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The Monti lithium project encompasses 81 concession applications, covering a vast area of 235 square kilometers (23,500 hectares). It is strategically located in Chile’s prime lithium brine production region.

β€œWe are incredibly thrilled about the immense potential that the Monti Lithium project offers, allowing us to enter the competitive arena of lithium exploration in Chile,” stated Sam Garrett, the chief executive of Great Southern Copper.

Chile, well-known as the leading copper producer globally, also holds the title of being the second-largest lithium producer. Both metals play a significant role in the global shift from fossil fuels to renewable energy sources.

The focus for Great Southern Copper now is to conduct thorough due diligence on the project and develop exploration plans.

Chile’s total estimated reserves and resources of lithium amount to 14.3 million tonnes, with the Salar de Atacama serving as the largest lithium-producing salt flat in the country, closely followed by Maricunga.

Geologist JosΓ© Cabello, from the consulting firm Mineralium, highlighted that the Atacama and Maricunga salt flats alone possess a combined lithium potential of 10.8 million tonnes, which accounts for 64% of global reserves.

Chilean salt flats
Northern Chile boasts several identified salt flats; however, only Atacama and Maricunga have undergone sufficient exploration to determine lithium reserves. (Image courtesy of Jose Cabello | Andean Geology, 2022.)

In April, Chile introduced a new national lithium strategy, which encourages collaborations between the public and private sectors for future lithium projects.

Under this fresh business model, the government will become the majority stakeholder in operations classified as strategically significant, while private companies can retain control of projects in non-strategic areas.

The current government, led by President Gabriel Boric, has expressed a willingness to be flexible in determining these categories, recognizing that certain salt flats may be too small for significant state involvement.

Historically, the Chilean government has played a prominent role in the mining industry. As specified by a 1979 law, lithium was declared a strategic resource exclusive to the nation’s development.

Before the implementation of the new lithium strategy, only SQM (NYSE: SQM) and Albemarle (NYSE: ALB) held licenses for lithium production in Chile, restricted exclusively to the Atacama salt flat.

President Gabriel Boric’s administration aims to expand lithium production beyond Atacama, as there are 18 other potential salt flats that could be open for lithium mining. The government also aims to encourage investments downstream in the lithium sector.

According to Chile’s projections, global demand for lithium is expected to quadruple by 2030, reaching 1.8 million tonnes. However, the projected available supply by then is only expected to be 1.5 million tonnes.

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