LONDON, Feb 7 (Reuters) – Tesla, the pioneer of the electric vehicle revolution, is turning to Chile to secure the lithium it needs to power its mass production drive.
Tesla and Chilean lithium producer SQM are “exploring” opportunities after the automotive company expressed interest in buying “important volumes” of the battery ingredient, according to Eduardo Bitran, head of Chilean development agency Corfo.
It’s an obvious place for Tesla’s chief executive, Elon Musk, to look for secure supply. The global lithium mother-lode is in the brine lakes of Chile’s Atacama desert.
And the biggest obstacle to its full development potential has just been swept away with the resolution of a long-running dispute between SQM and Corfo. The prospect of a wave of Chilean lithium supply flooding the market sent the share prices of other producers and prospectors spiralling lower.
Lithium bulls, however, needn’t worry too much just yet. Translating political breakthrough into production boom is going to take years.