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Lithium Power unit sues to stop Codelco from developing disputed claims

Lithium Power International Ltd.'s 50%-owned Minera Salar Blanco SpA sued Chile to stop Codelco from exploiting a lithium deposit in the Maricunga salt flat in the country, where both companies have claims, Reuters reported May 9, citing a lawsuit filed in March.

Salar Blanco claims Codelco's permit overlaps its property, alleging it was wrongly issued. The case forced the state miner to put on hold plans to look for a partner. In a statement filed with the court, Codelco said Salar Blanco opted to file the suit after it decided not to take part in the Codelco tender.

Lithium Power CEO Martin Howell said in an interview that he hoped that the suit would be resolved in six months, and Mining Minister Baldo Prokurica echoed Howell's sentiment.

"The worst that can happen is that this case drags on and that it slows the development of lithium," Prokurica said.

In February, Lithium Power said it intended to complete its 50% earn-in on the Maricunga lithium brine project in northern Chile up to six months ahead of the agreed joint venture schedule, following a successful preliminary economic assessment in December 2017. The preliminary economic assessment for the Maricunga project pegged a posttax net present value, discounted at 8%, of US$731 million, a 20.4% internal rate of return and a 3.25-year payback period.

Codelco in 2017 said it received interest from more than 10 parties for the joint development of the company's lithium assets in Chile, Reuters reported, citing Chairman Oscar Landerretche.