Delay in Chile mining permits a serious problem, says local head of Freeport
"The issue of permits is a serious one," said Mario Larenas, Freeport's top executive for Chile.
Chilean miner SQM, the world’s No. 2 lithium producer, reported a nearly five-fold rise in profits in the fourth quarter on Wednesday, driven by the surging price of the ultra-light metal that is key to make electric vehicle batteries.
The metal, extracted from brine lakes in Chile’s salt flats, is going through a price boom since the start of last year amid a global push toward electric modes of transportation, driving huge demand from carmakers and battery firms to shore up supply.
SQM reported a net profit of $321.6 million in the fourth quarter, compared with a net profit of $67.0 million in the year-ago quarter and beating the average Refinitiv estimate of $266.44 million.
The company, which has seen its share price climb strongly this year, just topped its target to sell around 100,000 tonnes of lithium in 2021.
SQM CEO Ricardo Ramos had said in November that the goal was to hit production capacity of 180,000 tonnes of lithium in 2022 and reiterated that forecast on Wednesday, saying expansions to hit the goal would be “completed in the coming months.”
Chile’s lithium sector has for years been dominated by SQM and rival Albemarle Corp, though the door has been edged open for rivals after Chinese carmaker BYD and local firm Servicios y Operaciones Mineras del Norte SA this year won an auction for new lithium contracts.
Incoming Chilean President Gabriel Boric has also said he wants to create a state-owned lithium firm, which could add an additional player to the sector. The Chilean state already owns Codelco, the world’s largest copper producer.
Optimism in the global lithium industry has risen significantly, helped by an accelerating global push towards electric vehicles.
(By Kylie Madry and Marcelo Rochabrun; Editing by Christian Plumb, Uttaresh and Nick Zieminski)
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