SANTIAGO, Chile--The botched tender for a lithium operations contract, resulting in a voided contest and the resignation of the mining undersecretary Tuesday, won't damp mining investments in copper-rich Chile.
Mining industry trade groups and the government see an investment pipeline of around $100 million through the end of this decade, going into new and existing projects producing copper, gold, silver and other metals.
The failed tender "was just an incident and it won't affect investments. There are very few countries that have the conditions for mining investments like Chile does," said Juan Carlos Guajardo of the Santiago-based Cesco think tank.
The government, to work around a constitutional prohibition to award new lithium concessions, recently launched a tender for a 20-year operations contract.
Lithium producer Sociedad Quimica y Minera de Chile Sa (SQM, SQM-B.SN) won it last week with a $40.6 million bid.
After one of the losing bidders filed a complaint accusing SQM of not meeting tender rules, the mining ministry voided the tender.
Copper workers' unions and opposition legislators opposed the tender, applauded when it was declared null, and called on the government--rather than private industry--to exploit lithium, used in the batteries of smartphones and electric cars.
But mining sector participants downplayed the importance of lithium in the local economy, which some in Chile had begun to call "white gold".
"In 2011 Chile's mining exports totaled $82 billion. Lithium accounted for only $204 million," said Alberto Salas, who heads the Sonami trade group representing private mining companies.
Chile exports a third of the world's copper and is one of the leading producers of other metals, such as molybdenum.
"There's lithium in many other places around the world. It shouldn't be considered a strategic mineral," Mr. Salas said.
Chile is among the leading producers of the mineral and through the tender sought to maintain its dominant market position.
Government officials said President Sebastian Pinera will now decide if a new tender will be launched.
foxbusiness.com
Mining industry trade groups and the government see an investment pipeline of around $100 million through the end of this decade, going into new and existing projects producing copper, gold, silver and other metals.
The failed tender "was just an incident and it won't affect investments. There are very few countries that have the conditions for mining investments like Chile does," said Juan Carlos Guajardo of the Santiago-based Cesco think tank.
The government, to work around a constitutional prohibition to award new lithium concessions, recently launched a tender for a 20-year operations contract.
Lithium producer Sociedad Quimica y Minera de Chile Sa (SQM, SQM-B.SN) won it last week with a $40.6 million bid.
After one of the losing bidders filed a complaint accusing SQM of not meeting tender rules, the mining ministry voided the tender.
Copper workers' unions and opposition legislators opposed the tender, applauded when it was declared null, and called on the government--rather than private industry--to exploit lithium, used in the batteries of smartphones and electric cars.
But mining sector participants downplayed the importance of lithium in the local economy, which some in Chile had begun to call "white gold".
"In 2011 Chile's mining exports totaled $82 billion. Lithium accounted for only $204 million," said Alberto Salas, who heads the Sonami trade group representing private mining companies.
Chile exports a third of the world's copper and is one of the leading producers of other metals, such as molybdenum.
"There's lithium in many other places around the world. It shouldn't be considered a strategic mineral," Mr. Salas said.
Chile is among the leading producers of the mineral and through the tender sought to maintain its dominant market position.
Government officials said President Sebastian Pinera will now decide if a new tender will be launched.
foxbusiness.com
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