Under the tide of electric vehicles, the world's largest copper miner accelerates its entry into lithium business.

SMM News: Chilean state-owned copper company Codelco, the world's largest copper producer, has recently accelerated the layout of its lithium mining business, highlighting the impact of the wave of electric vehicles on the global mining landscape.

Chile has the world's largest reserves of lithium, a key component of batteries for electric cars and high-tech equipment. But Chile's lithium production has barely increased in recent years because the country's constitution leaves the right to develop lithium mines to the state, which has long been hampered by strong local bureaucracy.

Codelco said in a statement on its website that it would continue its plan to develop lithium in Maricunga salt flats after obtaining approval from local environmental regulators.

SMM: according to a new lithium mining policy issued by Chile in 2016, the Chilean government plans to increase lithium production by instructing its state-owned mining companies to develop salt in the north of the country. In 2018, Codelco was granted a concession for the entire area of (Salar de Maricunga) in Marikunga Salt Lake, the second largest lithium mine in the country, and the largest in the country is Atacama Salt Lake (Salar de Atacama).

Codelco said in a recent statement that its plan had been approved by the Atacama Environmental Assessment Committee, whose members approved the implementation of the plan by a vote of 10 to 0.

The company said its exploration activities would begin in April 2021, with a minimum of six months and a maximum of 10 months.

"based on the results, especially based on the concentration of lithium dissolved in salt water in the above-mentioned mining areas, Codelco will determine whether the next phase of the project is environmentally and economically feasible."

Codelco has been talking about moving into the lithium business for years, but it has repeatedly delayed and focused on its main copper business amid tight liquidity.

Demand for lithium is widely expected to soar by 2025. Lithium compound maker Livent announced last Thursday that it had extended its supply contract with Tesla until 2021. Tesla previously announced that he would start producing his own batteries, so Tesla needs a stable raw material supply chain.

This year, Tesla aims to produce at least 500000 electric vehicles, a goal that is likely to increase significantly in 2021. To achieve this growth, however, Tesla needs to get more batteries for his car. In order to produce more batteries, the supply of raw materials needs to be stronger. The extension of the supply agreement between Livent and Tesla is a step towards this goal.