After Chile buying spree, Wealth Minerals eyes rule changes

Tue Aug 30, 2016 11:01am EDT
 
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By Rosalba O'Brien

SANTIAGO (Reuters) - After buying four lithium properties in Chile in recent months, Wealth Minerals wants more, but any future business plan will depend on how the government decides extraction should be regulated, its Chilean executive director said.

Canadian-listed Wealth Minerals WML.V has agreed to buy 53,000 potential lithium producing hectares in northern Chile at a cost of $38 million since Chilean mining veteran Marcelo Awad joined in April. They include three purchases close together and another in the Salar de Atacama, where industry incumbents SQM SQMa.SN and Albemarle (ALB.N: Quote) are already producing.

"We had to negotiate individually without the other owners realizing, simultaneously. We got very similar prices for the three," Awad told Reuters in a recent interview at his office in Santiago.

The so-called "lithium triangle" that straddles Chile, Argentina and Bolivia has drawn a flurry of activity in the last year as prices for the material have soared on hopes of an electric vehicle and solar boom.

In part, that is due to more business-friendly conditions in Argentina and the promise of a regulatory shake-up in Chile, where private companies must generally partner with the state to mine lithium.

Awad, who previously had senior executive roles at copper giants Codelco and Antofagasta, said the mining ministry is seeking to clarify the new rules by the end of March 2017 at the latest.

"If the framework doesn't change, we will partner with a state business," he said. "That would mean it getting a stake and not putting in a peso - but that option exists."

State-run Codelco [COBRE.UL] is due to announce in coming weeks a call to tender on two lithium properties it holds, a joint venture deal that has attracted a lot of interest and which Awad said "of course" includes Wealth Minerals.   Continued...