CleanTech Lithium (CTL ) issued a statement regarding Chile's recently announced National Lithium Strategy. CleanTech is developing 3 lithium projects in Chile, in which it said that it has been assured by the Chilean government that the company's assets at Laguna Verde, Francisco Basin, and Llamara, will not require majority state participation.
Chile's new policy aims to establish majority state control for assets deemed to be of "strategic importance" to the country, understood to relate primarily to the Atacama and Maricunga salars due to their massive lithium reserves. By comparison, CleanTech's assets are considerably smaller with lower lithium grades and, while economical for companies like CleanTech, are not of scale considered an asset of "strategic importance" to the Chilean government.
Chile's new policy gives companies like CleanTech the option to invite state participation, but does not require it. Private companies developing non-strategic assets will also have the option of applying for a CEOL (special lithium operation contract).
CleanTech said it is currently in discussions with Chilean state entities regarding potential minority participation in its projects, to the extent it deems beneficial, and has CEOL applications ready should such state participation materalise. CleanTech did not provide further details regarding the progress of these discussions.
Aldo Boitano, CEO of CleanTech Lithium, commented: "The Government's proposals seek the responsible and sustainable development of the lithium industry in Chile, for the benefit of the country alongside that of private enterprise. These aims are in-line with CTL's strategy. Based on the advice and guidance we have been given, we have been reassured that CTL's assets will not be subject to state control under these proposals, and in fact we see the potential for significant benefit, through partnership opportunities and a more certain investment climate."
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Good news from CleanTech as the company assured investors its lithium assets in Chile will not be negatively impacted by the country's new protectionist policy. CleanTech could actually benefit from future government minority ownership in its assets and the various protections that will entail.
Chile's goal with its new strategy is to partner rather than nationalise, with the aim of leveraging complementary skills and resource in developing its lithium industry. As lithium becomes a critically important global resource, Chile aims for the right balance between generating government revenues and encouraging private/foreign investment. As outlined, Chile's proposals should result in lower investment risk for certain private lithium developers in the country.
CleanTech's strategy is already largely aligned with the government's proposals, hence CleanTech's pending decision to participate in public-private partnerships. CleanTech's green extraction methods (DLE), low water usage, and focus on renewable energy, should appeal to the government as it has set green priorities in its new strategy.
That leaves CleanTech on track to production as it continues to develop its Chilean projects based on two successful drilling campaigns in 2022 that resulted in 2 million tonnes of LCE JORC compliant resource. Three further drilling campaigns are underway, while CleanTech's DLE work, which involves a sustainable lithium extraction method, has produced 1 kg of battery-grade lithium carbonate, with a larger DLE pilot plant due for commissioning in Q3 2023.
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