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According to foreign media reports on January 17th: A joint venture worth 1.5 to 2 billion US dollars hopes to become Chile’s third lithium producer and is currently in negotiations with investors to finance its project.

Sebastian Yang, a board member of Simbalik Fund, said that Simco Lithium, owned by a Singapore investment fund and a Chilean business group, is studying the sale of non-controlling interests. Although the investment of about 600 million US dollars in the project is too small to attract large mining companies, it has drawn interest from battery and electric vehicle manufacturers.

“We have been in negotiations with different groups along the value chain,” he said in an interview.

Lithium is a key component of electric vehicle batteries, and users of lithium have been investing in exploration and mining projects around the world in hopes of securing future supply. Despite a significant drop in copper prices over the past year or so due to new mine production, the long-term growth in demand from the transition away from fossil fuels has supported the outlook for copper.

Another owner of Simco is Chile’s Errazuriz group, which is working with indigenous groups and is in the final stages of completing a feasibility study for the Maricunga salt flat project. Yang said the company hopes to begin construction this year using the direct extraction method developed by Utah-based IBC Advanced Technologies, which has shown promising results in pilot plants. The company has signed purchase agreements with Panasonic Holdings Corp. and Chori Co. Ltd.

Chile currently has only two producers, SQM and Albemarle Corp., operating under strict government production quotas. However, according to Yang, Simco has concessions predating Chile’s 1982 regulations, which means it can independently develop and operate the project. Despite the government introducing a new model under which private companies must collaborate with state-owned enterprises such as Codelco, Salar Blanco, another project in Maricunga with pre-existing permits, has been acquired by Codelco through a state-owned company, Lithium Power International Ltd. This transaction will streamline Codelco’s efforts to develop lithium in salt flats.

Yang said Simco plans to continue advancing as an independent project and will seek arbitration if its permit is revoked. Nevertheless, the joint venture still proposes to work with Codelco in Maricunga, such as providing processing of the state-owned company’s brine or helping it establish its own plant. “The door is always open,” Yang said.

He said that once the mine is operational, Simbalik may consider exiting the joint venture.

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