The companies and technologies behind the battle for lithium control

Direct extraction technology is at the centre of the dispute following the government’s announcement of the National Lithium Strategy. US-based Ensorcia Group has become the main threat to SQM in the bidding for exploitation quotas in the Salar de Atacama.

Almost a month has passed since President Gabriel Boric announced on national television the National Lithium Strategy, an agenda that includes, among other things, the reorganisation of the actors that currently dominate the market for the so-called “white gold” in our country. Although the government has opted for public-private partnerships to exploit lithium, the criteria that will be used to determine which companies will be chosen for these partnerships promise to vary significantly from previous years.

One of the criteria already announced by the government has to do with sustainability in the way the mineral is exploited, focusing on technologies that guarantee minimum impact on the salt flats and their ecosystems. The president himself mentioned DLE technology, i.e. Direct Lithium Extraction, as an example during his speech.

Broadly speaking, DLE technology consists of extracting brine directly from aquifer wells through absorbent filters that remove the lithium, and then re-injecting the remaining liquid to ensure recirculation. It is estimated that about 90% of the water extracted through this technology is returned to the brines, preventing the aquifers from being depleted.

Although DLE technology is still in the experimental stages in much of the world, the industry itself has already begun to invest heavily in it. In September 2022, SQM announced a US$1.5 billion investment in a development plan that included, among other things, the exploration of new direct lithium extraction techniques. Albemarle, the other company mining lithium in the Salar de Atacama, also announced in November of the same year its commitment to research and develop DLE technology.

“We are very pleased to be able to move forward into this new era of lithium, through innovative actions that will allow us to take concrete steps to address climate change, where lithium plays a fundamental role. Today is the time to accelerate the energy transition, which must be just, and at Albemarle we are committed to this challenge and to look beyond it,” the US company said.

SQM, for its part, assured that it would have a final proposal on the application of direct lithium extraction techniques by March this year. However, two months have passed since the self-imposed date and there is still no news about the results of these investigations. El Ciudadano contacted the company to find out the details of this strategy, but to date there has been no response.

The big competitor

Despite SQM’s attempts to develop direct extraction technologies, there is a company that already has experience in this area and is positioning itself as the main threat to Julio Ponce Lerou’s company. This is Sorcia Minerals, a subsidiary of the US-based Ensorcia Group, which has already announced an initial investment of 500 million dollars in our country to produce 20,000 tonnes of lithium carbonate.

Rodrigo Dupouy, Ensorcia Group’s president for Latin America, stressed that the company is the only one that has the technology to implement the DLE method in the country on the scale required by the lithium industry.

“This is a very complex type of technology that has been in development for a long time. We are the first to have it for industrial production and, at least to our knowledge, there is no other company in the world with the same conditions,” Dupouy told El Ciudadano.

“Companies have no choice but to start operating with DLE in Chile, as President Boric said when he announced the National Lithium Policy (…) Those who do not have DLE will not be able to carry out new projects in the country. That is why today we are the ideal partner for the State, because we have the technology they are looking for,” he adds.

Despite the advantage that Ensorcia Group seems to have over other companies, some are more cautious about putting the final nail in SQM’s coffin. Francisco Rivas Saldada, director of the School of Mining Engineering at the University of Talca, says that in public-private partnership processes, the history and experience of the companies with which the state will partner is also usually taken into account. In the case of SQM, there is already decades of collaboration that can work in the company’s favour.

“The government’s strategy seeks to attract new companies and create new alliances to increase production and make it much cleaner, but that does not mean that these two companies (SQM and Albemarle) cannot make some changes, modernise their processes and enter into competition with the others. They may be at a disadvantage in some aspects, but they are also at an advantage in others: perhaps in the infrastructure they already have in place in Chile, the experience with the communities, for example. But they will have to adapt much more quickly in order not to be left behind,” he says.

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