August 10, 2010 - El Mercurio de Santiago

Translation by Emily Pehrsson - original clipping follows.

Gal Luft, Executive Director of the Institute for the Analysis of Global Security and analyst at the International Lithium Alliance:

Lithium expert warns that Chile could lose the leadership in the industry

The specialist said that as demand grows for batteries of electric cars, more players will enter the market. He also called for the elimination of current restrictions on their holdings operating in the country.

R. Fernando Road

The American expert on commodities of Lithium International Alliance and executive director of the Institute for the Analysis of Global Security (IAGS), Gal Luft, stayed only two days in Chile, long enough to determine that our country could lose its current hegemony in the lithium industry - which today reaches 45% of global supply - due to the entry of new players into the market.

Invited by Sonami and the Ministry of Mines to the seminar "Lithium and the National Economy,” which had the cooperation of “El Mercurio," the expert noted that it is essential that Chile remove the current restrictions on its [lithium’s] development and use because currently only SQM, linked to businessman Julio Ponce Lerou, and the Chilean Society of Lithium (SCL Chemetall), can extract this strategically classified mineral.

The result was that both companies held the necessary permits before the Constitutional Organic Law on Mining Concessions and the Mining Code prohibiting the delivery of concessions.

- Does it make sense to restrict the use of lithium on the basis of its potential use in nuclear power generation?

"Nuclear fusion has advanced little since the 70s and we still have to accomplish decades of technological breakthroughs in this field. It will be even longer before we can introduce a commercial use for it. Therefore, it makes no sense to restrict the use of lithium on the basis of its potential role in nuclear energy. We cannot predict whether the merger will be possible and therefore it would be sensible to liberate the regulatory restrictions on the lithium industry related to the merger. "

- Is this happening in another country?

"No. Each country has its own definition of what constitutes a strategic raw material. None of the major economies of the world considers lithium to be a strategic raw material, but its importance for the future of the world economy is increasingly being recognized.”

- Why is this?

"The importance of lithium will increase as the electric car industry grows, which requires a supply of batteries."

- Chile could lose its leadership in the global supply of lithium due to these restrictions?

"In the nineteenth century, half the world's oil came from Azerbaijan. As oil demand grew worldwide, people found more and more oil around the world. Today, Azerbaijan's oil constitutes only 1% of world supply. What I mean by this is that lithium is an abundant resource. As demand increases, more and more countries will develop their own lithium resources and the largest lithium producers now will lose their hegemony."

- Do you see any limitations on the future availability of lithium, and how may this impact the development of the electric industry?

"It is possible that in the very near future the supply will occasionally be interrupted with a well-known rise in prices, but I will not exaggerate that risk. Lithium forms only a small fraction of the cost of a battery and it is not likely that an increase in its price will have a significant impact on the overall cost of a vehicle or stop the electrification process. In short, I do not foresee a chronic shortage of lithium or a lithium peak in the future.

''None of the major economies of the world consider lithium to be a strategic raw material, but its importance for the future of the world economy is being increasingly being recognized.

“Lithium is an abundant resource. As demand increases, more and more countries will develop their own lithium."