Plenty of questions surround Lithium Power’s Chilean licences
Does Lithium Power International have something to tell is shareholders? Apart from an update on the $30 million sale of a subsidiary to Albemarle, it has been silence from the lithium explorer since April.
Lithium Power, with a market capitalisation of around $214 million, is among a handful of companies operating in a resource-rich area in Chile known as the Lithium Triangle. The company’s Maricunga resource is south of others owned by Orocobre, SQM, Albemarle and Galaxy.
The lithium industry is booming in Chile. The New York Times
But Chile has been planning on nationalising swaths of its lithium deposits, plansfirst flagged by the government in April. Since then, it has put out a complicated strategy paper that boils down to three alternative endings for companies whose licences were created before 1979 – as Lithium Power’s were, according to statements it has made to shareholders.
That type of licence is invalid if lithium mining is not specifically permitted, or if lithium mining was tacked on to the licence after 1979, according to one interpretation of the new rules. Alternatively, a licence handed out before 1979 is valid if the project is developed with Codelco, the state agency.
It is an issue that has received plenty of coverage in Chile, where the local El Mercurio de Antofagasta suggested the pre-1979 licences held by Lithium Power specifically did not include lithium. That said, the publication could only cite “people close to the issue”.
Initiating coverage on Lithium Power several years ago, Canaccord Genuity analysts expected Maricunga could generate annual earnings of up to $US200 million ($292 million) over a three-decade mine life.
While the situation remains murky, Lithium Power has made no effort
Read more on afr.com
