Chile mining body says new lithium projects needed beyond SQM, Albemarle

By Daina Beth Solomon and Fabian Cambero

SANTIAGO (Reuters) - The head of one of Chile's top mining associations on Tuesday urged the government to speed up efforts to expand the lithium industry without waiting to hammer out deals with miners SQM and Albemarle as it seeks to boost state control.

Chile's government under President Gabriel Boric this year announced plans to only allow public-private partnerships for lithium contracts, and appointed state run copper producer Codelco to negotiate with SQM and Albemarle, the only producers in Chile of the light metal used for electric car batteries.

Codelco expects to reach a deal with SQM by the end of the year ahead of the 2030 expiration of the company's contract, but details about what the agreement could entail are scarce. Albemarle's contract is up in 2043.

Joaquin Villarino, the head of Chile's Mining Council whose members include Codelco as well as international miners BHP, Teck and Anglo American, said other lithium exploration projects are being neglected.

Although Chile is the world's second biggest lithium producer, making it a key player in the global shift to adopt electric vehicles, the industry has been held back by a lack of projects in the pipeline.

"There could be bidding on contracts in other salt flats in Chile, and that isn't happening," Villarino said in an interview. The government has outlined goals to offer exploration contracts to private firms in the first half of next year.

"What does not seem reasonable is that the entire development of the lithium industry depends on the negotiation of Codelco's contract with SQM," Villarino said.

He noted that neighboring Argentina, which has numerous lithium projects underway, could be poised to gain ground on Chile if President-elect Javier Milei, a libertarian, succeeds in plans to energize the flagging economy.

"If Milei's project works ... it's likely that many investors will prefer to go there, rather than stay or invest here in Chile," he said.

"We are missing a tremendous opportunity and time is being wasted."

(Reporting by Fabian Cambero and Daina Beth Solomon; Editing by Chris Reese)