A Holy Trinity in the North of Chile: Solar power, Lithium and Astronomy
Photography: Courtesy of ALMA photo gallery
Are we entering post-transition times? Is this the era of the scientific "drive"? Pragmatism has paid well, and Chile’s USD 23,000 GDP per capita means we are now a higher-middle-income country in LATAM. However, to carry out any challenging endeavor, it is good advice to bear in mind Einstein’s words on what lies ahead: “1% inspiration and 99% transpiration”.
Country Risk Chile assesses the growth potential of the North of Chile and its scientific significance in placing Chile one giant step ahead in science, R&D, and sustainability. This Holy Trinity can be found in the convergence of the Sun, the Stars, and the Salt Lake. The "s" factor
Gaze into the skies for solar energy (NCRE), dig into the salt lakes for the lithium reserves (exploitation tied up to value-added investment such as batteries), and climb its mountains to use its unique astronomical sites.
The Astronomical Atacama Desert:
The Atacama Desert is the driest in the world but exhibits enormous potential for science. Chile has the clearest skies for astronomical study. Over the last decade, a significant number of state-of-the-art telescope centers have been built to gaze into the skies and disentangle the secrets of planetary creation. What does a new telescope mean for the astronomical community? What is the strategic importance of this drive for Chile?
In 2014, Chile authorized the construction of the E-ELT, the European "extremely large telescope" on Armazones Mountain, an initiative the astronomical community ESO Chile brought in 2012. By March 2017, works commenced. The E-ELT will be an infrared optical telescope with a 39-meter opening. It will be situated 20 km from ESO's Very Large Telescope (VLT) at Paranal site. First of all, the E-ELT and the VLT join another astronomical center in the north in whole operation: the ALMA complex (Atacama Large Millimeter / submillimeter Array), a joint project between ESO, American NRAO and Japanese NAOJ, and the Gemini Observatory consisting of 8.1-meter diameter optical/infrared telescopes located on two privileged locations, one in La Serena, in the north of Chile and its twin in Hawaii.
Chile must continue to build a reputation for scientific expertise in first-class astronomy. So far, 3 of its most prominent figures have been internationally recognized for their breakthroughs.
Pay attention: they are women. Astronomer Maritza Soto discovered a planet three times bigger than Jupiter at 323 years light from Earth, and Professor Maria Teresa Ruiz has been awarded not only the National Prize of Science but she has been also distinguished with the L'Oréal-Unesco Award for Leading Women in Science. Millarca Valenzuela stands out for combining astronomy and geology in her studies of meteors.
Such a novelty (women who became astronomers, women who have made breakthroughs) prompted initiatives to attract more female participation in this scientific activity. Inspiring Girls is an initiative encouraging young female students to become scientists in Chile. Or when science helps gender parity.
The challenge for Chile is to build a pool of astronomical-related scientists to excel in the field of science “made in Chile.”
Lithium Labs:
Back in 2016, Bachelet declared the lithium reserves "strategic.” The end of the commodities boom or the super commodity cycle has translated into the necessary "shock" to bring the Chilean government on alert and devise a strategy. AmCham Chile describes the move to value-added investment tied to lithium exploitation as the most significant challenge for authorities in transitioning from raw material exports to the elaboration of sophisticated products at a time when clean energy and electromobility are driving the demand for lithium. The challenge lies at the heart of a scientific drive in Chile, which necessitates skills formation in this area and new technologies. The successful deal between Chilean authorities (CORFO) and Soquimich (SQM) puts Chile at the forefront of strategic planning. It finalizes four years of challenging and bitter negotiations in the wake of SQM's eroded prestige in cases of tax fraud and illegal campaign financing, which forced the company to pay the Department of Justice (DOJ) and the SEC a USD 30 million fine over irregular payments to "politically exposed" (PEP) figures that resulted in a negative impact on shareholders. As part of the deal, Chile has granted SQM the right to continue exploiting the non-metallic mineral until 2030, by then a public bid will take place. Between 2018 and 2030, SQM will pay the Chilean state around USD 10.000 million in terms of exploitation rights. Conditions imposed on SQM involve lithium extraction for batteries (which implies a greater demand for copper used in car batteries). The 32% of SQM in the hands of Canadien Potash cannot be sold to another big competitor; it should be acquired through public shares or pension funds; that way, Chile ensures there is no threat of another big competitor other than SQM and Albemarle (winner of the bid to exploit the state-owned salt lakes on condition that a lab is put in operation and technology is available for Chilean technicians and experts). Another condition is that Ponce Lerou or any of his relatives will not / cannot control or preside over SQM until 2030.
For some experts, this is the nearest form of "expropriation" in modern times for the level of conditions imposed by the Chilean state on SQM in its national struggle to control the lithium exploitation; but, for some others like Eduardo Engel, this is the Best Deal Chile could ever seek in dealing with SQM when lithium extraction is pressing.
For Country Risk Chile, this is an Executive, Self-Asserted move by the state. Lithium is the future, and there is no time to lose. Or ask Elon Musk, who came to Chile in December and is already announcing Tesla Motors might be arriving in the country shortly after negotiations with SQM over the production of lithium batteries for cars.
Solar Energy:
Chile leads in NCRE in the region. Bachelet has just announced that the era of coal energy is coming to an end in Chile. In the announcement, authorities stated that those coal plants still in operation must comply with stringent legislation to cut emissions. Now, Chile is the leader in the region in solar, eolic, and geothermal power, as all these resources are available in Chile and are found primarily in the Atacama Desert. Indeed, by Nov 2017, Mr. Andrés Rebolledo, Minister of Energy in Chile, inaugurated the largest solar panel field in Latin America in the Atacama region.
"During the past three years, we have worked to hit ambitious goals in the energy sector. One of them was to increase clean generation by 70% in 2050, and based on our solar power projection, we can reach 90% of NCRE by 2050, of which 50% is solar power", said Minister Rebolledo at the site.
Setting the example is fundamental, today La Moneda Presidential Palace relies on solar panels for 18% of its energy consumption. Then came the connection of two grids (SIC and SING) that feed energy to Chile so that solar, wind, and geothermal power can be relayed along the country "with a capacity of 24.000 MW and a demand of 11.000 MW accounting for 99% of installed capacity of the generation". But this move to renewable energy has also been implemented by Luksic's Antofagasta Minerals, relying on its solar panel field for 45% of its energy consumption instead of diesel, reducing 8.000 tons of carbon emissions. Chile inaugurated the biggest wind farm to deliver 70% of its capacity to the "Los Pelambres" mining site in 2014. That way, green mining is also possible, along with higher productivity.
Soledad Soza, January 31st, 2018.
