Lithium Power International Ltd (ASX:LPI) welcomes Chile’s long-awaited new National Lithium Policy (NLP), which it says largely reflects discussions held with the country’s various authorities and private institutions.
Chilean President Gabriel Boric outlined last Thursday plans for the future implementation of lithium exploration and exploitation policies for Chile that are intended to bring the country back to the forefront of global lithium production.
According to LPI, the NLP is different from the position of previous administrations in that it takes into consideration the objectives of the Chilean State, including its role to ensure the efficient and rapid development of the lithium industry.
LPI's wholly-owned subsidiary Minera Salar Blanco is the sole owner and concession holder of both Stage One and Stage Two of the Maricunga Lithium Brine Project, which is fully permitted for construction.
Exciting time for lithium industry
“We are very pleased to see that our hard work over the last seven years of advancing Maricunga Stage One Project has been reflected in a development that closely mirrors the objectives of the newly announced National Lithium Policy,” LPI chief executive officer Cristobal Garcia-Huidobro said.
“Technical advancement and innovation, environmental and social responsibility of the highest standard, and landmark community agreements that provide the community the opportunity to share in the exciting future of the growing lithium industry, are all in line with the objectives of the strategy."
Not a one-size-fits-all
Since the new policy was unveiled however, there have been differing opinions regarding the effectiveness, practicality and legality of the national strategy, to which Garcia-Huidobro noted that the NLP was not a ‘one-size-fits-all’ legislation.
In particular, the NLP does not constitute a nationalisation of the lithium industry in Chile but instead, promotes future public-private alliances, according to LPI.
Its objective is to set the conditions and parameters for the country to have a more active involvement and higher financial returns in a strategic industry, particularly where those lithium resources are located on concessions already owned by the Chilean State on the Atacama Salar.
“There are several specific elements that differentiate LPI’s Maricunga Project from the rest of the existing operations or future lithium projects in Chile," Garcia-Huidobro said.
“Rather than focus on what the legislation means for the future of the Chilean lithium industry, our focus is on what it means for our Maricunga Lithium Project and how it will transform the Chilean lithium industry through its development.
“At LPI, we welcome President Boric’s National Lithium Strategy and its objective to positively transform the Chilean lithium industry."
Garcia-Huidobro believes the NLP not only benefits Maricunga but has the potential to accelerate the development of the project’s second stage.
“We embrace the objective of Chile’s current administration to promote public-private associations as the path forward for the development of the Maricunga Stage Two project," he said.
New policy provides clarity
LPI is evaluating a number of financing options for first stage of the project, including strategic equity investment from potential offtake partners to debt and equity financing alternatives.
With the NLP in place, financiers and investors will have clarity on the parameters under which the Maricunga project will be developed.
To read LPI’s full statement on the NLP’s impact on the company's Chilean operations, click here.
To attend a conference call hosted by Garcia-Huidobro today at 12.00 pm AEST, click here.