Lithium Power sold its Western Australia in June assets in June to focus on the development of its flagship Maricunga project. The asset, located within the so-called lithium triangle in northern Chile, is estimated to contain about 1.9 million tonnes of lithium carbonate equivalent (LCE).
Chile has given Codelco a key role in a new public-private model for the sector, announced in April, which calls for public-private partnerships for future lithium projects.
Acquiring the Australian miner, with its key Chilean asset, would strengthen the copper giant’s new role in the country’s lithium industry.
The buyout is Codelco’s first of this kind and requires LPI shareholder approval for the deal to proceed, with a vote expected in January 2024.
Finding a copper-lithium balanceChile is already the world’s no. 2 producer of lithium after Australia and holds the world’s largest known deposits of the coveted battery metal.
Some analysts have questioned whether Codelco, which has no experience as a lithium miner,can tackle the challenge of boosting its own production while kick-starting Chile’s lithium industry.
The miner this year has seen financials deteriorate and posted its lowest production in nearly 25 years. Its output has fallen 17% and is expected to keep dropping until 2025. Moody’s Investors Service earlier this month cut its investment-grade credit rating by one notch and assigned a negative outlook.
Codelco chairman MaximoPacheco said the acquisition is an example of how the company will execute its strategy of becoming “a globally relevant supplier of critical metals to enable the energy transition.”
The state miner said it would fund the acquisition from within its existing financials.
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