[DF] After 70 years, a North American Company will reactivate cobalt exploitation in Chile
The Genlith company will initiate the explorations in April and plans to start production in four years. The investment will be over US $ 100 million mark.
The US investment fund Genlith is developing an ambitious project to reactivate the exploitation of cobalt in Chile. The company has just signed acontract with the option to mine with the Calleja Molina family, owner of mining properties in the cobalt zone, located in the district of San Juan – where past mine sites operated – to onc again extract cobalt in national territory, after more than 70 years of inactivity.
The conditions mean a periodic payment to the Calleja family for a period of three years, after which Genlith would become the sole owner, although a royalty payment system would be maintained.
Although the initiative is at its first stages, it is expected that in the month of April to begin the first exploration campaigns, which initially have a budget of US $ 5 million, expandable if the previous estimates are met.
It is foreseen the company could start producing by 2022. First a metallurgical process must be developed for processing of the ore. It is estimated that the minimum investment base would be US $ 100 million.
This partnership takes place in the midst of the strong development that is taking in electro mobility, and that has already strongly driven the price of lithium.
Additonally, the agreement is set in the midst of the global boom around cobalt because of its scarcity, as a key element in the development of batteries. It is currently estimated that 50% of world production comes from the Congo, where working conditions in the extraction are deplorable and even slave like conditions even reported of the hiring of minors. That is why companies such as Apple and Sony announced that they will discontinue importing cobalt from that country, which has had an important effect on their market price, which in two years has quadrupled, from US $ 20,000 per ton in 2016, to be slightly under US $ 80,000 tons during the last weeks.
In terms of the Chilean project, Genlith will be the operator, through its local subsidiary Chilean Cobalt Corporation (CCC), led by Ignacio Moreno, an economist who previously dealt with Cochilco and Enami; and was general manager of the mining company Cerro Dominador before being appointed as Mining Undersecretary for the current government, until 2016.
“It is reasonable to think that there is an interesting potential in this sector. It has been exploited by small scale mining by cobalt and copper, but we know that small scale miners work on the surface, therefore, the bet we are taking is that at greater depths we can find resources and reserves that can support a medium scale mining project, but of high economic value “, explained Moreno.
Yesterday, Greg Levinson, CEO of the North American fund specialized in the development of lithium assets and other investments with positive environmental impact, participated in a seminar organized by Corfo, in which he stated that “Chile has all the conditions to lead a revolution in green mining ”
That is why within the firm´s plans in the country, is to its eventually is to enter other related businesses, such as the lithium market itself.
“They are looking at other aspects that deal with clean energy: generation projects and lithium projects eventually in Chile, but also throughout the region. They have had a fairly open spectrum of investment objectives and the main thread of interest is investment towards the new economy, clean economy, “said Moreno.
CAP also looks at this Business
Another company that closely follows the development of cobalt is CAP, since this mineral is also a byproduct of iron production. The entire analysis began after Corfo´s initiative, to provide resources for the investigation of this productive process. In addition, the company is located in areas where there is cobalt present, so the firm would be exploring development options.
This information was confirmed by CAP´s President Fernando Reitich, who assured: “The outlook is broader than cobalt, Cap Mining seeks diversifying beyond iron mining.”
(Source: Diario Financiero)