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By Maytaal Angel and Amanda Cooper
LONDON, Nov 1 (Reuters) - Chile expects state-owned miner Codelco to produce its first lithium in the next six to seven years, as the race heats up around the world to meet booming demand from the electric vehicle industry, mining minister Aurora Williams told Reuters on Wednesday.
Most of Chile’s 7.5 million tonnes in reserves of lithium, a key component in rechargeable batteries used in electric vehicles, are found in brine deposits, which take at least seven years to develop.
A number of privately-owned companies already mine for lithium in Chile, but this will be the first foray into this sector by the world’s largest producer of copper, the backbone of the electronics industry.
“Based on the work that Codelco is doing right now, they should be able to start mining in the next six to seven years,” Williams said on the sidelines of the annual LME Week industry gathering in London.
Chile will hold presidential elections next month and the current government, headed by President Michelle Bachelet, will hand the reins over to its successors by March next year.
Williams added the government hoped Codelco, which is currently in talks with more than 10 potential strategic partners to develop the country’s lithium reserves, would make a decision by March.
“This is Codelco’s decision, the company has its own board. But we hope that this final phase will realistically be over while we are still in government,” she said, adding that on March 11 next year, the newly elected government will take over.
Demand for lithium is expected to surge in the next few years.
Codelco already stands to benefit from the rise of electric vehicles, as an electric car tends to need around 75 kilos of copper, compared with around 25 kilos in a conventional fossil fuel-powered car.
Consultants Roskill estimate 785,000 tonnes of lithium carbonate equivalent a year will be needed by 2025, amounting to a 26,000-tonne shortfall from anticipated supply. That compares with 217,000 tonnes of demand versus 227,000 tonnes of supply this year.
Analysts at UBS said earlier this year they expect global sales of electric vehicles in 2025 to reach 14.2 million units, or 13.7 percent of the total, compared with under 1 million units, or less than 1 percent, in 2017. (Reporting by Maytaal Angel and Amanda Cooper; Editing by Mark Potter and David Evans)