A wealth of opportunity: Wealth Minerals CEO Henk Van Alphen talks lithium in Chile
Wealth Minerals is embarking on a new lithium project in the Atacama Salar of Chile. As the energy sector doubles down on renewable technology, demand for lithium-ion batteries is growing exponentially and with Atacama’s famously high-grade resource it seems a promising opportunity. Molly Lempriere talks to Wealth Minerals CEO Henk Van Alphen to find out more.
As demand for renewable energy grows, so does demand for reliable energy storage. This has led to a boom in the battery industry, in particular lithium-ion batteries. With the inevitable growth in lithium demand, it is expected that within the next five years the amount of lithium going towards batteries will more than double.
This is something Wealth Minerals is hoping to capitalise on as the company starts work on a new lithium mine in the Atacama Salar, Chile’s largest salt flat. Already the second biggest producer of lithium, Chile’s abundant resources offer an exciting opportunity to new companies, as Wealth Minerals CEO Henk Van Alphen explains. But is lithium here to stay? And as a resource so connected with environmental technologies, just how environmentally sustainable is lithium production?
Molly Lempriere: You set up Wealth in 2005?
Henk Van Alphen: I inherited the company and the first thing I did was that we went into the uranium space in Argentina; there was the uranium boom, and then the boom disappeared. Our stuff in Argentina was relatively grass roots exploration so when the uranium boom was over we couldn't really continue doing anything in the uranium space.
So Wealth just sat around until I decided last year that we should revive the company and start looking for opportunities. I didn't start out with lithium, we started out looking for gold projects and then the lithium came just by virtue of me being exposed to South America for a long time.
I've been going to South America for 26 years so I've had a fairly large exposure there, this opportunity became clear and I believe that the lithium space is here to stay. This is not going to be a flash in the pan commodity, this whole change that is happening in the world with cars, with renewable power, lithium is going to be an obvious part of that no matter what happens.
If you want to have a charge, you need lithium. Maybe the big batteries ultimately will not need lithium, but if you want things to be smaller, lithium is really one of the few materials that can handle that.
ML: Could you tell me about the Atacama site?
HVA: When you're looking at the lithium space, you’re really looking at the so called Golden Triangle of lithium in Argentina, Chile and Bolivia. Then the production coming out of that really comes out of the Atacama Salar, which accounts for 35% of the world’s production.
Another little bit of lithium comes out, or used to come out of Argentina through a company called FMC. They have some sort of proprietary technology to produce lithium out of their salar.
So we luckily managed to get a piece of the Atacama Salar. There are really only two companies there, three holders of claims: Corfo, SQM and now Wealth. BHB has a small piece but that's not for lithium that's for water, and they're not doing anything there anymore.
The salar just so happens to be the best salar in the world, best evaporating rates, very large, high grades, it's a unique situation in terms of salars.
We're in the north end of the salar, and we're starting exploration. First we do some hydro-geological exploration, geophysics and then drill; hopefully within the first three months of this year we'll have some drilling done. Hopefully drilling into brines and it’s then we'll see what the grade is and how much we have.
We kind of understand what is motivating the salar, what it will look like. The grade may be surprisingly high and the size of the brines many be surprisingly large, it is a very large salar so we are anticipating that things will work out.
ML: Is it very different to the Trinity projects that you've got going?
HVA: Oh yeah, the Trinity projects are higher up in the salar, and very small. So they will be a long time coming after the Atacama project. Even then, evaporating may not be as obvious at those sorts of elevations so we may have to do things differently.
But there will be some work done at the Trinity project. One of the pieces we have on one of the salars, SQM owns two thirds and we own one third of the Quisquiro salar. I know SQM is supposed to start a drill program there in the New Year some time, so we'll wait till then.
The focus is really on the Atacama salar. There are maybe some acquisitions that we're looking at, so we may at the same time focus on a new acquisition that will come through, and we'll focus right away on that as well. But Atacama and if we do have a new acquisition then we'll focus on those two.
ML: What's it like working in Chile?
HVA: Chile is a fairly developed country; you can go to Chile and think you're in North America. Downtown Santiago you'd think you could be anywhere in North America, it's very modern. It's been very stable, the government is very stable so the rules and regulations work. You know what the rules and regulations are so you know how you have to work. Many other countries change them overnight but Chile is very stable in that sense, so it's very nice to work there.
ML: Have you found the rules and regulations have become more stringent since the 2010 Chilean miners entrapment?
HVA: All the mining industry is subject to much more stringent environmental regulations; that is just a process that's going on anywhere in the world including Chile, or anywhere in South America.
But otherwise the rules in terms of lithium in Chile should be relaxing, because there was a moratorium on lithium export or production. They are changing the rules and regulations in the first quarter of next year, and they're probably going to relax restrictions.
We are looking at teaming up with a government-owned company, so we can automatically go around those. But lots of people haven't gone to Chile because of the regulations that still exist, which is probably something that doesn't make a lot of sense in today's world anymore. I always say, if you want to find out if lithium is still used in nuclear bombs then you have to phone the guy in North Korea since he's the only guy who still seems to be blowing them up, so he'll know all about it. I don't have his phone number though, unfortunately.
ML: Is electric car technology going to be key to lithium's success?
HVA: Right now 35% of the world’s consumption of lithium is going into batteries and that's going up to 75% in five or six years. So if you look at the world, governments are really starting to pump the idea of electric vehicles, like Norway's legislation. Recently all the car makers in Germany got together and they're starting to build charging stations all over Europe in anticipation of bringing electric vehicles into the marketplace.
If you go to China where they have major pollution issues, - as well as London apparently, yesterday it came out that this is the worst pollution that they've had - so they have to start thinking about electric buses and electric trucks.
The last time I was in China, I went to visit a battery company, and they already had electric buses and electric trucks, they're really moving towards electric vehicles. In the big cities or anywhere else in the world we really need batteries to clean it up.
That's where the future lies in lithium, in the battery space.
ML: How long do you think it will take for Atacama to be fully up and running?
HVA: It's the permitting process that you have to worry about. To establish a resource that's a very fast process, and then it's just going through the permitting process, building a plant and then you're in an evaporation process. You have to wait for it to evaporate so that's another factor.
In terms of Atacama it's probably not that long, so I would say if everything goes well, we're four years away from production.
ML: What is the environmental impact of mining lithium?
HVA: Lithium production is pumping brine out of a salar, and just putting it into an evaporation pond. The sun does the rest and then you have a plant, say in terms of SQM or Rockwood they have it on the coast, and it's processed there. So there really isn't very much environmental exposure to the whole thing.
What you do have to worry about of course is you can't start pumping the salars dry, there's an equilibrium there that you can't press. As long as you're not pumping any more than the salar will give to you then you aren't really affecting that much.
It's not a big open-pit mine, it's fairly benign. Another thing is, like what will probably happen in our case, is that we'll be going into brines that are underneath certain layers, a bit like oil extraction. You don't really disturb the surface at all, you don't even know that there's pumping going on. So that makes it even more environmentally benign.
In terms of mining I don't think we can really make it any better than this.