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.
Photographs by Marcos Zegers
Dec. 28, 2021 Updated 4:23 p.m. ET
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.
…
Read more: https://www.nytimes.com/2021/12/28/climate/chile-constitution-climate-change.html
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.
Correction (EW): h/t William Wilson – Lithium has a stronger reduction potential than sodium, so in principle Lithium packs more “punch”.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
This new President seems like just another Castro. All fired up over equality till he starts feeling that leftist lust that comes with power gain.
Then it’s just more pretending to be new socialism/communism.
35 year old former student activist? That sounds like a career he should have transitioned out of about 14 years ago. What makes such inconsequential people attractive to large blocks of voters?
They are promised they will get rich with OPM. A pipedream, of course, as what always happens, and I do mean ALWAYS happens, is the economy tanks as money that should have been reinvested in productive ways is instead squandered for “equity” (sic). After the Elites take their cut of course.
Speaking of lithium, how far would a Tesla go if you charged it with an efficient gas powered generator using just 1 gal of gas?
Kramer, good question! I have always wonder why the Muskmobiles
do not have alternators.
Oh for crying out loud, like the so-called “rare earth metals”, lithium is freaking everywhere. If Chile tries to jack up the price the buyers will go elsewhere.
IN A GLOBAL ECONOMY THERE IS ALWAYS SOME WHERE ELSE.
They are not trying to jack up the price. They are looking to increase the governments share of the revenue.
Given that the brine production method used in Chilean deposits has much higher margins (inclusive of current royalties) than the hardrock producers in other parts of the world (with the exception of Greenbushes mine in Australia), it does seem likely that there is room to “squeeze” producers with not significant threat of replacement from the much more common hard rock producers.
This has already been put into practise, royalties more than doubled between 2017 and 2019 in Chile from USD740/t LCE to USD1835/t LCE.
Dean, they must be getting advice from California Cannabis Commission.
“Piles of Lithium rich salt, Salar de Uyuni, Bolivia. Luca Galuzzi (Lucag), edit by Trialsanderrors”
Eric, Trialsanderrors” indeed! The photo is of salt, mainly table salt, with a fair amount of undesirable magnesium chloride and potash salt as well. Virtually all the lithium chloride remains in solution.
The production process: pump the brine into large, shallow, rectangular evaporation ponds covering several thousand acres. Precipitate NaCl. Drain off the liquid into another pond and let KCl (potash product) precipitate. Finally drain this remaining liquid bearing LiCl into a third pond and allow evap until liquid contains ~6% Li- salt. Pump this liquid into the Li extraction plant.
The sodium chloride salt is left as waste.
Chile has lots of lithium, which is essential to the world’s transition to green energy.
Left unstated is why this transition is necessary. To save poley bears or minnow fish?
There is no evidence this transition is necessary.
There will be no real “transition”, there will just be oddles of tax dollars wasted on unworkable computer models of an imagined transition. I’m old enough to remember Solyndra.
Grabriel Boric is of Croat descent from Punta Arenas. The typical person from Punta Arenas consider the people and the leaders from the Caribbean to be non serious. They are typically classist and xenophobic. They typically look up to Sweden as their role model.
In the 19th century Chile made fortunes supplying nitrates to the World, with the invention of synthetic nitrates and smokeless gunpowder the fortunes vanished. Copper and agriculture became the substitutes. Lithium may go the way of nitrates.
Chile and Argentina are controlled by immigrants from Europe and Eastern Europe, pretending to be South Americans. The Lefties that think that it will be like the times of Salvador Allende will probably be in for a big surprise. I would expect his Presidency to be more like the countries of northern and eastern Europe backed up by the fast acting and fierce police that they have.
Mining engineer who has worked in central America here.
Nationalisation is not going to work, the pressure to supply adequate capital is where governments fall over nearly every time. Letting companies operate the mines and using royalties to secure a share of the revenue is a much more sensible way for governments to exploit natural resources.
But it does highlight one of the main problems with mining. Localised, and often quite severe, negative impacts from mining loaded up on the areas surrounding the mines, and benefits accruing mostly to capital cities or other countries. Takes some serious national government restraint to not squander the generated revenue, Norway is one of the better performers in that regard.
Mining wages can seriously distort local economies, resources such as water can be wrecked by the cowboys invariably attracted to new boom minerals. It happened in NSW Australia in the 90’s with the seam gas cowboys and generated enough public fury to get the industry almost killed.
Voters elected Gabriel Boric, a 35-year-old former student activist
Every politician that there has ever been is a former student activist
Sodium is 3x heavier than Lithium. There are 10 Kg of Lithium in an EV battery, given the overall dramatic weight of an EV, adding 20 Kg more by switching to sodium means absolutely nothing. Replace 1-2 more steel body panels with Aluminium or carbon fiber, and you are back to where you started. Sodium is not a weight issue. The issue is that there are no Sodium batteries.
I’m sure Gabriel Boric (his name reminds me of Borat) has a list of well educated and experienced ‘friends/cronies’ ready, willing and able to run the mines for the good of the people. Their ultra true hearts would never allow anything to happen to all that nasty money and power but it helps others.
Do you get a hint of sarcasm in my comments?
James Bull
EVs can’t happen at scale anyway, as that would require a massively enhanced electrical grid, while grids all over the West are being debilitated by the same eco-ideology that is pushing for EVs.
Of course it is no accident that they are herding our civilization into a bottleneck. To the eco-ideologues it is the human race that is the problem. They are absolutely looking for ways to herd the bulk of humanity into giant sacks that they can tie up with some rocks and drop into the ocean.