CleanTech Lithium optimistic after Chilean government's lithium policy announcement
() , a Chile-focused lithium explorer, commented on the recent announcement by the government of Chile regarding the designation of strategic salars in the country and the creation of a Protected Salars Network under the administration's National Lithium Strategy.
The Chilean government yesterday approved the creation of the Protected Salt Flats Network in support of its National Lithium Strategy. The government exempted private companies with projects outside of the protected network and not defined as "strategic". CleanTech Lithium's assets fall outside of this category and therefore will not be directly affected by the recent government action.
The government called upon lithium developers to express interest in non-protected salars, starting in April 2024. It is expected that around July 2024, the Ministry of Mining will list the salt flats where there is private sector interest, and those may require local indigenous consultation before works can proceed. After July, Special Lithium Operation Contracts (CEOLs) will be awarded specifying the terms and conditions for commercial development.
CleanTech has already expressed interest by submitting CEOLs in September 2023 for its lead assets in Chile - Laguna Verde and Francisco Basin - with support from local communities.
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To advance its National Lithium Strategy, the Chilean government has defined a network of protected salars that will require further environmental assessment. CleanTech Lithium's "non-strategic" assets Laguna Verde and Francisco Basin do not fall into the protected category and therefore can proceed with development as planned. The announcement by the government clarifies the National Lithium Strategy, which is good news for CleanTech as it removes uncertainty and derisks its two projects in the country.
For assets outside the protected network, companies must submit applications for contracts (CEOLs) granting permission to develop the salars and specifying terms and conditions e.g. the need for local indigenous consultations. CleanTech has already applied for the CEOLs, which we expect will be granted in Q3 2024. Companies that are granted permission can take leadership in developing the new lithium projects, either with participation from the state or on their own.
CleanTech is in an excellent position to develop its assets in Chile under the current regulatory environment. For one, the company is a pioneer of DLE technology in Chile and has committed to using 100% renewable energy in its lithium extraction and processing. DLE is a more modern and sustainable method of extracting lithium with significant environmental and cost benefits. CleanTech's approach is aligned with Chile's National Lithium Strategy, which mandates the use of DLE.
CleanTech has also placed an emphasis on community engagement and wellbeing. In December 2023, the company announced an alliance with the Colla territorial communities for the first co-created mining model for lithium extraction in Chile.
In the likely event that the Chilean government enters a partnership with CleanTech, we expect significant near-term upside as the company's two projects are streamlined toward production by 2027. As a result of Chile's new policy, the government projects lithium production in the country to increase by 70% by 2030 and 100% by 2034.
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