A Legacy of Mining Busts Haunts Chile’s Lithium Dreams – by Laura Millan Lombrana (Bloomberg News – May 25, 2018)

https://www.bloomberg.com/

Dozens of towns abandoned after a collapse in nitrate prices offer a cautionary tale for the next hot commodity.

Chile knows what it is to be expendable. Ghost towns that pepper the nation’s north are a painful reminder of a time when it was replaced almost overnight as the world’s top fertilizer producer. These days, the decaying buildings and rusty plants serve as a harbinger for miners embarking on a major expansion of lithium.

Lithium prices have tripled in three years, triggering a race to find a replacement for the soft, white mineral that is used to make batteries for a range of products from electric cars to mobile phones.
As researchers at institutions from the U.S. Department of Energy to Stanford University work behind the scenes to come up with a chemical alternative, local mining executives say Chile’s boom-to-bust past often weighs on the back of their minds.

While miner Soc. Quimica & Minera de Chile SA, or SQM, believes the lithium business “will go on for a while,” Chief Executive Officer Patricio de Solminihac acknowledges they always need to keep an eye out for the next big development. The nature of disruptive technologies means “they come out of nowhere and develop incredibly fast,” he said.

That’s what happened back in the early 20th century, when German scientists invented a synthetic crop fertilizer that could be produced much cheaper than the mined nitrates that Chile was shipping around the world. Nitrate prices tumbled, and in the 1930s, Chile’s economy collapsed as miners went bankrupt.

The government defaulted on foreign debt, social unrest forced the president to flee into exile and the once-buzzing mining camps in the Atacama Desert turned to ghost towns, crumbling under the harsh sun and wind.

For the rest of this article: https://www.bloomberg.com/news/features/2018-05-25/a-legacy-of-mining-busts-haunts-chile-s-lithium-dreams

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