"There is tremendous potential in the lithium industry."
Pablo Altimiras, Senior Vice President of Lithium and Iodine at SQM, shares his vision on the projections and development of the Mt Holland project in Australia, highlighting its potential, competitiveness and contribution to the growth of the industry.
Interview with Pablo Altamiras
1. What specifically convinced you about this project in Australia?
There are a number of factors. The first is the quality of the natural resource: it is very large and has a high lithium content, which allows us to consider future expansions beyond the initial 50.000 tons we expect to achieve in this first stage.
The second reason is that, according to our studies, the project is very cost-competitive, which is in line with our idea of always being very low-cost producers
Third, Australia is an ideal country to do a project like this. It is a safe jurisdiction to do business, it is a mining country with clear regulations, and it has experience in developing similar projects.
And fourth, the quality and experience of our partner. Wesfarmers is a great company and perfectly complements our capabilities. This makes our joint venture very beneficial for both of us.
2. Will you continue to be partners with Wesfarmers Limited, or does this joint venture have an expiration date or is it only for a part of the project?
Our partnership with Wesfarmers is going very well and we complement each other perfectly. There is tremendous potential in the lithium industry and in Australia in particular, and we believe that together we can add value in these challenges.
3. Is the lithium they will process in Australia of better quality than the Chilean lithium? What proportion of exports will come from Chile and from Australia once Mt Holland is operational?
The natural resource at Mt Holland is different from that of the Atacama Salt Flat: it is a solid mineral called spodumene. However, the quality of the product will be the same, as it meets the end customer's requirements.
At SQM, we have many years of experience adding value to our products, especially lithium, refining it to the highest purity levels that allow its use in state-of-the-art batteries. What we will do in Australia will be no different from what we do in Chile in that respect.
Regarding volumes, in Chile we are working on an expansion to reach 180 tons. In Australia, we will own 50% of 50 tons; therefore, it is clear that in this first stage, the proportion in Chile will continue to be much higher.
4. What are the lithium demand projections for the next five years or more? What explains this boom?
Our projections indicate that demand for LCE by 2025 could be between 800 and 1 million tons. By 2030, scenarios suggest that demand could exceed 2 million tons of LCE. This implies an average annual growth of approximately 20%, a very significant figure and one rarely seen in other minerals.
The main driver of growth is the penetration of electric cars. In 2020, the number of electric cars sold worldwide was just over 3 million units. By 2025, we expect more than 13 million, and by 2030, around 30 million. This represents a tenfold increase in just 10 years.
5. Will SQM be able to organically absorb some of that increased demand, or will more projects or acquisitions necessarily follow?
We are working towards that. In Chile, we expect to grow from 70 to 180 tons of LCE, and in parallel, we will develop this project in Australia. This growth represents a tremendous effort, but it is necessary to continue supplying this expanding market.
Above all, we are always evaluating alternatives where we can add value.
6. Besides Chile and Australia, in which other countries are prospecting for new lithium explorations?
We haven't closed ourselves off to initiatives in other jurisdictions. We've evaluated projects in several countries, and when we find something where we can add value, we'll let you know promptly.
7. You recently announced an agreement with a division of LG. Are more deals like this on the way? When should they be announced?
We continue to work on different business solutions for our various clients. One of these solutions is long-term contracts, and we are therefore evaluating the possibility of implementing more of them in the coming months. The important thing is that these contracts are beneficial for all parties involved.
8. Regarding the environmental claims you have in the Atacama Salt Flat, doesn't this put the future of your operation at risk?
Sustainability is a fundamental issue for the company. So much so that a few months ago we announced an ambitious sustainability plan that includes significant commitments to substantially reduce the use of continental water in all our operations; decrease brine extraction from the salt flat; and achieve carbon neutrality in our lithium operations by 2030, in addition to strengthening our ties with local communities.
The implementation of this plan is underway and we are incorporating new international standard certifications to meet our goals.
9. What environmental measures are being taken in Australia to prevent something similar to what happened in Chile from occurring there?
Australia, like Chile, has very stringent environmental legislation and institutions. Therefore, the project has taken into account all the necessary studies and measures to ensure environmental protection.
On the other hand, Wesfarmers shares our vision regarding sustainability, and for this reason we are already evaluating various mitigation measures and improvements so that this project has the least possible impact on the community and the environment.
10. Will SQM open an office in Australia? Who will be in charge of that operation?
SQM has had an office in Australia for several years. However, the execution of the project and its subsequent operation will not be the responsibility of any of the partners, but rather of Covalent Lithium , the joint venture we have with Wesfarmers.
