... Chile, Argentina and Bolivia have the potential to become the ?Middle East of lithium? given their vast unexploited reserves
Source: US Geological Survey, SinoLatin Capital Analysis
Argentina: Salar de Hombre Muerto ? Owned by FMC Lithium (NYSE: FMC), a New York Stock Exchange-listed firm with a stock market value of US$4 billion. Hombre Muerto which literally translates as ?Dead Man? is located in the remote north of Catamarca Province, 4,000 meters above sea level.
Argentina has several ?salares? and the most important one is ?Hombre Muerto? owned by FMC
? Reserves: 360,000-400,000 tons at 0-30 meters of depth; 850,000 tons at 0-70 meters of depth with brine grades of 0.062%
? 100% of the production is for export. The product is transported by rail to Antofagasta (Chile) where it is exported
? Neighboring Salar de Olaroz is being developed by Australian-listed Orocobre (ASX: ORE). Bankable Feasibility study expected in 2010
? Salar de Rincon was being developed by Australian-listed Admiralty Resources (ASX: ADY) but they sold it to the Sentient Group, a natural resources-focused private equity fund
Bolivia Salar de Uyuni - It is located in the Potosí and Oruro departments in SW Bolivia 3,650 meters high. It purportedly holds half of the world's reserves of lithium. There is currently no mining plant at the site and the Bolivian government doesn't want to allow exploitation by foreign corporations. Instead it intends to build its own pilot plant.
Bolivia also has many salares but the attention is focused on the Salar de Uyuni which could hold 50% of the world reserves
? Reserves: 5,400,000 tons (different estimates suggest 9 million tons)
? Comibol (Bolivian State Mining Company) is investing roughly US$6 million in a small plant near the village of Río Grande on the edge of Salar de Uyuni, where it hopes to begin Bolivia?s first industrial-scale effort to mine lithium
? In early February 2010 the Bolivian government created ?Empresa Nacional de Evaporíticos,? a national entity responsible for the development of the lithium, boron, phosphates and potash
? Indigenous groups near the Salar de Uyuni are pushing the government to grant them total or partial ownership of the lithium in the area. The new Constitution that Bolivia just passed in January 2009 could grant the demands of the indigenous groups. One clause could give the indigenous group control over the natural resources in their territory, strengthening their ability to win concessions from the authorities and private companies, or even block mining projects. Yet none of this has discouraged foreign enterprises from attempting to gain access to Uyuni?s lithium.
? Assuming Uyuni began operating, it could take as long as 5 years before the lithium carbonate would hit the market
? Other than Uyuni there are many other much smaller salt lakes in Bolivia in which the government has little involvement. These opportunities are being developed by private mining companies such as New World Resources
Political constraints could get in the way of producing lithium carbonate in a meaningful way at the Salar de Uyuni
Chile: Salar de Atacama - is the largest salt flat in Chile. It is located south of San Pedro de Atacama, is surrounded by mountains. The Salar de Atacama contains one of the largest and best quality reserves of lithium-brine in the world with high concentrations of potassium, lithium and boron. A US Geological survey estimate pegs the reserve base of the Salar de Atacama to be around 3MM tons while the Chilean State mining agency (CORFO) estimates it to be 4.5MM tons.
The Salar de Atacama is one of the best lithium assets in the world. Chile also has access to the Pacific Ocean, making exports relatively easy (Bolivia is landlocked)
? There is some friction between the local communities and the mining companies over water rights. Mining already consumes 65% of the limited water in the Salar de Atacama region
? The largest lithium chloride producer in Chile is SQM, a US$10 billion stock market value firm listed on the New York Stock Exchange
? Environmentalists are also concerned about the unique flora and fauna of the region, including damage to the habitat of the famous pink flamingoes
? SQM only employs several hundred people at the evaporation plant. Therefore, an expansion in lithium production will not bring great employment benefits to the region, adding to the complexities of balancing growth and the environment
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