Bearing Lithium Corp V.BRZ

RE:Interesting Article on the Maricunga Project

[pone]

Southybird wrote: -CORFO, the Chilean government agency founded to promote economic development in Chile, administers the lithium properties in the Atacama salar and holds special production agreements with major global lithium producers Albemarle and SQM. The properties from which these companies produce lithium are either owned by CORFO or subjected to contractual arrangements for exploitation with the latter. Albemarle announced in January that they had reached agreement with CORFO to expand their production from the Atacama Salar. 

-As part of that agreement they accepted a new royalty agreement which had progress increases in the royalty related to the price of lithium carbonate sale prices. CORFO is seeking an upper royalty rate of 60% for prices above US$12,000/tonne of lithium carbonate. 

-It should be noted that geographically the Maricunga and the Atacama Projects are located in two different salars in Chile. These projects are in two different regions and therefore have no interaction between them. 

The most significant difference between the situation of Albemarle (and SQM) in the Atacama Salar and Lithium Power's Maricunga Joint Venture (MJV) is that the MJV owns the Litio, Cocina, San Francisco, Salamina, Despreciada and Litio properties outright and CORFO has no ownership rights (or other rights to levy "super royalties") in the Maricunga salar. 

Hence, the "super royalty" or the price for the lease negotiated between Albemarle and CORFO does not apply to the properties in the Maricunga salar. 

On that basis, production from the MJV properties would involve only the eventual payment of a standard "mining royalty" which is a mining tax applicable to the net operating income deriving from mining operations in Chile, which is vastly different to the situation between Albemarle and CORFO. 

That is wishful thinking.   If the government wants to charge a higher royalty, it will try to find a way to negotiate a higher royalty.

Nothing in the evidence you present shows any law or legal argument about why higher royalties only apply to leased land owned by the government.