Lithium Turmoil: Chilean President Gabriel Boric Squeezing Miners

Guest essay by Eric Worrall

Interesting times for green leaders like President Biden and UK PM Boris Johnson; As the green revolution drives up prices, freshly elected far left Chilean President Gabriel Boric has shaken the Lithium industry, by promising everyone in Chile a larger slice of the Lithium pie.

Chile Rewrites Its Constitution, Confronting Climate Change Head On

Chile has lots of lithium, which is essential to the world’s transition to green energy. But anger over powerful mining interests, a water crisis and inequality has driven Chile to rethink how it defines itself.

By Somini Sengupta

Photographs by Marcos Zegers

Dec. 28, 2021 Updated 4:23 p.m. ET

Leer en español

SALAR DE ATACAMA, Chile — Rarely does a country get a chance to lay out its ideals as a nation and write a new constitution for itself. Almost never does the climate and ecological crisis play a central role.

That is, until now, in Chile, where a national reinvention is underway. After months of protests over social and environmental grievances, 155 Chileans have been elected to write a new constitution amid what they have declared a “climate and ecological emergency.”

And so, it falls to the Constitutional Convention to decide what kind of country Chile wants to be. Convention members will decide many things, including: How should mining be regulated, and what voice should local communities have over mining? Should Chile retain a presidential system? Should nature have rights? How about future generations?

Chile prospered by exploiting its natural riches: copper and coal, salmon and avocados. But even as it became one of Latin America’s richest nations, frustrations mounted over inequality. Mineral-rich areas became known as “sacrifice zones” of environmental degradation. Rivers began drying up.

Anger boiled over into huge protests starting in 2019. A national referendum followed, electing a diverse panel to rewrite the constitution.

On Dec. 19 came another turning point. Voters elected Gabriel Boric, a 35-year-old former student activist, as president. He had campaigned to expand the social safety net, increase mining royalties and taxes, and create a national lithium company.

The morning after his victory, the stock price of the country’s biggest lithium producer, Sociedad Química y Minera de Chile, or SQM, fell 15 percent.

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While Chile is not the only global source of Lithium, Chile is a major player, producing 22% of global supply. Any interruption to Chilean Lithium production could stress an already tight market, potentially disrupting global electric vehicle rollout plans.

My guess is international miners are wondering whether Gabriel Boric is another Hugo Chavez, whether Chile will suffer the same anti-capitalist madness which crashed oil production in Venezuela.

Lithium mining is as simple as mining gets, take salt rich brine and let it dry in the sun. But far left socialists in Venezuela can’t even get food production right, so the risk of politically driven collapse of Chilean Lithium production hangs over the entire industry.

There is no substitute for Lithium for portable devices or electric vehicles. While scientists are exploring battery technologies based on chemically similar but much more common elements like sodium (as in sodium chloride – table salt), Lithium has one overwhelming advantage over the alternatives – it is incredibly lightweight. Lithium is the first metal on the periodic table, half the density of water.

Battery weight is a big issue for EVs. Moving from Lithium to far heavier Sodium based batteries could add significantly to battery weight. Though having said that, atom for atom, Sodium does pack a bit more punch than Lithium. It remains to be seen whether this extra punch is enough to compensate for the additional weight.

Interesting times for Lithium miners, and for green leaders like President Biden and Prime Minister Boris Johnson, who have bet a lot of political capital on a rapid transition to affordable electric vehicles.

via Watts Up With That?

December 29, 2021 at 12:27AM

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