Lithium Power shares surge after it confirms Chilean buyout talks
Lithium Power International is in exclusive negotiations to sell itself to Chile’s state-owned copper mining company as the South American country moves to take control of significant resources projects.
The ASX-listed lithium explorer with tenements in Chile’s abundant “lithium triangle” including its flagship Maricunga project has granted due diligence to Corporación Nacional del Cobre de Chile, known as Codelco.
Codelco circles just five months after Chile announced its new national lithium strategy, which as reported by The Australian Financial Review’s Street Talk column in July, poses a potential roadblock to Lithium Power’s plan to develop the battery grade lithium project.
A lithium mine in Chile. Lithium Power is in discussions with the government-run resources company. Bloomberg
The new policy reflects Chile’s desire to exert control over its reserves of lithium with demand for the key resource used in the batteries that power electric vehicles and energy storage expected to surge in the coming years.
The policy, released in April, suggests some licences handed out before 1979 – like the one held by Lithium Power – may, at worst, not cover the mining of lithium, or at best force a joint venture with a Chilean state agency.
Carlos Claussen, a leading lawyer in Chile, told Street Talk in July that while significant uncertainties remained about how the new rules were interpreted, and the licences “would not enable them to exploit lithium”.
But Lithium Power said it had provided plenty of information about the legal status of the Maricunga project to investors in an update on April 24. “The standing of its concessions and permitting according to Chilean law is solid,” the company added. Despite this, Lithium Power
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