Chile is the Leading World Supplier of Lithium

The fabrication of more efficient and cleaner batteries for mobile phones and PC notebooks has catapulted the demand for lithium, in abundant supply in northern Chile.


The Salar de Atacama or Atacama Salt Flats, located 55 kilometers north of the popular tourist town of San Pedro is not only the largest in the world; it is also where 40% of the world’s reserves are found of a mineral that is key for technological development: lithium. The reason is that whereas before, batteries were fabricated with nickel cadmium, today lithium has positioned itself as a much cleaner, more efficient alternative.

With the explosive growth of the cell phone and portable computer markets, the demand for lithium has also grown exponentially. Despite the fact that it is not yet being traded in financial markets as other raw materials, lithium carbonate (the chemical salt derived from lithium that is most actively traded in world markets) doubled its price in 2009, moving up to US$7,000/ton.

“Chile, and particularly Salar de Atacama, has the largest reserves of lithium in the world, estimated at 40 million tons of lithium carbonate out of a total of 100 million tons worldwide,” explained Andrés Yaksic, Marketing Manager of SQM,a Chilean company producing nearly 40,000 tons of the mineral in northern Chile.

Chile’s Market Edge
However, aside from having this resource, Chile has a long mining tradition (the country is the world’s number one copper producer), as well as the infrastructure needed to develop the lithium industry. Yaksic assured us that thanks to Atacama’s climatic conditions, solar energy is the primary energy source for the process of refining lithium concentrate, making its production a much more sustainable process.

“Lithium is used most of all for manufacturing rechargeable batteries for portable devices such as laptops, cell phones and iPods – 27% of production is aimed at this industry – and also for the process of glass production,” Yaksic explained.

In recent years, it has been estimated that lithium production for battery manufacturers has been growing by 20% yearly, with Mitsubishi forecasting ratcheted demand levels for the next 10 years. Moreover, according to the US Department of the Interior’s US Minerals Yearbook, lithium’s natural properties make it a more attractive material for batteries. “Lithium batteries have enormous potential for sustained growth,” the study points out. “Despite the fact that there are still some aspects that need to be resolved, new technologies involving lithium are currently being developed. Its use could generate a tremendous growth in demand.”

Indeed, car manufacturers such as Toyota, GM, Mercedes Benz and BMW are already using lithium in their hybrid models, while other companies such as Volkswagen, Nissan-Renault and Mitsubishi itself have announced they will also implement it in their vehicles.