Great Southern Copper (LSE: GSCU) announced on Wednesday it had secured the Monti lithium project in Chile’s Salar de Atacama salt flat for US$2.26 million ($3 million).
The U.K.-based mineral exploration company has already paid an initial US$10,000, which will be followed by annual payments over four years until completing the agreed sum.
The Monti lithium project comprises 81 concession applications for a combined area of 235 sq. km, located in Chile’s premier lithium brine production region.
“We are very excited by the scale of the opportunity that the Monti Lithium project presents and to enter the highly competitive lithium exploration space in Chile,” CEO Sam Garrett said in a statement.
Chile is the world’s top copper miner and the second-largest producer of lithium. Both metals are considered vital commodities for the global transition from fossil fuels to renewable energies.
Great Southern Copper said that it will now focus on conducting due diligence on the project and prepare plans for its exploration programs.
Total reserves and resources of lithium in Chile are estimated at 14.3 million tonnes, with the Salar de Atacama being the largest lithium-producing salt flat in the county, followed by Maricunga.
Geologist José Cabello of consulting firm Mineralium said the Atacama and Maricunga salt flats host combined lithium potential of 10.8 million tonnes, corresponding to 64% of global reserves.
Some of the salt flats identified in northern Chile. Only Atacama and Maricunga have been subject to enough exploration to define lithium reserves. Credit: Jose Cabello/Andean Geology, 2022
Chile announced in April a new national lithium strategy, which calls for public-private partnerships for future lithium projects.
Under the new business model, the state will take a controlling stake in operations considered strategically significant, while private firms will be able to retain control of projects in non-strategic areas.
The nation’s left-leaning government has vowed to be flexible when defining those categories, as it acknowledges that some salt flats are too small for the state to have a major role.
The Chilean state has always been a main actor in the mining industry. A 1979 law declared lithium to be a strategic resource, stipulating that its development was the exclusive prerogative of the nation.
Before the new lithium strategy, only SQM (NYSE: SQM) and Albemarle (NYSE: ALB) were licensed to produce lithium in Chile, and limited to only the Atacama salt flat.
President Gabriel Boric’s administration wants to expand production beyond Atacama, as there are 18 other salt flats that could potentially be open to lithium mining. His government is also looking to encourage downstream investments.
Global demand for lithium, according to Chile’s own projections, will quadruple by 2030, reaching 1.8 million tonnes. Available supply by then is expected to sit at 1.5 million tonnes.
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