Re-Launching Chile’s Lithium Industry
After years of restrictions for the lithium industry in Chile, the country has recently announced key changes to a decades-old mining law in an effort to stay competitive in the global lithium market.
After years of restrictions for the lithium industry in Chile, the country has recently announced key changes to a decades-old mining law in an effort to stay competitive in the global lithium market.
Inflationary costs, unexpected weather issues and global economic malaise have created a challenging environment for many lithium producers and exploration and development companies.
The world's driest desert, including a northern part of Chile and Argentina is currently the host to some of the largest and most efficient lithium producers in the world. Both Salar del Hombre Muerto and Salar de Atacama have seen some of the wettest winter weather to affect the region in decades, where even just fractions of an inch of rain have done some reported damage in areas.
EV World reports that Argentina is promoting the idea of an OPEC-like cartel for itself, Bolivia and Chile.
In an exclusive interview with Lithium Investing News, Daniela Desormeaux, General Manager of SignumBOX, discussed some of the most important characteristics for a lithium mining company. A trained economist and expert in industrial chemicals and natural resources, she explained the premium associated with the quality of the deposit in terms of economic feasibility and profitability.
Performance of the lithium business beat original company expectations for 2010, and the segment posted record sales volumes. The lithium market improved strikingly over 2009 lows, and the company estimates that total demand for lithium in 2010 was greater than in 2008, the previous record year for demand.
Mineweb.com reports that the demand for the metal set is to grow as car makers increasingly look to lithium as a fuel solution, so Chile, Bolivia and Afghanistan are emerging as the giants of lithium resources.
The limited number of publicly traded companies engaged in lithium exploration and production is even more concentrated than the geographical extent of operations; however, the dynamic industry experienced some important developments which grabbed investors attention this year.
Last week, the top lithium mining companies urged Chile to overhaul regulation to allow them to increase output of a metal seen booming in coming years anticipating a larger scale adoption and demand of electric cars and lithium batteries. The government wants the industry to grow; however, opposition has said the state should keep its tight grip over an industry that could bring billions of dollars in revenue in the future.
Investors are always looking for a competitive advantage. ‘Life begins with Li’. Endeavoring to identify a hidden gem in the lithium investment world for investors will involve eliminating potential bias slant while identifying the real competitive advantages.
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