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TASHKENT (TCA) — Last week the State Committee of Geology and Mineral Resources of Uzbekistan declined a project to develop the Shavazsai lithium deposit in the Tashkent region due to its commercial impracticability.

The project was to produce 3,700 tons of lithium carbonate a year. Investment was estimated at $50 million. The output was to be used for production of Li-ion batteries at the Jizzak Battery Plant.

According to the State Geology Committee, confirmed reserves at Shavazsai are 120,000 tons of lithium dioxide with lithium content of 0.58 percent. This is enough for developing the deposit over 30 years.

With the world's lithium production of 100,000 tons a year, Uzbekistan's planned production would not influence the market but would pave the way for Tashkent to develop innovation-technology industries.

Demand for lithium has increased dramatically over the past ten years, due to its use in batteries for notebooks and mobile phones.

The largest lithium carbonate producers (82 percent of the world's output) are SQM, Chemetall and FMC Lithium, producing lithium at lakes in Argentina and Chile, as well as Talison Minerals, developing mineral lithium deposits in Australia.

Their main competitor — China — also invests public and private funds in lithium production. Moreover, Chinese invest in lithium production abroad, particularly in Australia. Poorer countries like Uzbekistan have to seek foreign investment.

In 2007 Uzbekistan first invited foreign companies to develop its rare-earth metal deposits — the State Geology Committee offered to explore 12 promising areas in western and southern Uzbekistan with further granting of exclusive development rights.

In April 2007, the State Committee and Japan Oil, Gas and Metals National Corporation (JOGMEC) signed a memorandum of cooperation in mineral resources development. The Japanese company was offered the opportunity of exploration for uranium and rare-earth metals in the Central Kyzylkum Desert.        

Later, in 2010, when international prices for lithium were rather high, lithium production in Uzbekistan looked attractive. Then the State Geology Committee and South Korea's Shindong Enercom signed an agreement to set up a joint venture for developing the Shavazsai deposit. Later, however, the Koreans dropped the project.   

"Lithium pricing is rather complicated," said Ilkhat Tushev, analyst at Central Asia Investments. "Lithium is not traded at exchanges and a list of its compounds includes hundreds of names." In particular, metallic lithium used in batteries costs around $100 per kilogram. Prices for other lithium compounds depend on the purity of product, and here Uzbek lithium would have big problems.

"Technology of lithium extraction from salt lakes outplays extraction from poly-metallic ore (like in Uzbekistan), both in terms of cost efficiency and purity of product," says analyst Anvar Jumayev.

Considering the planned lithium project in Uzbekistan commercially impracticable while international lithium prices are tending to lower, the State Geology Committee has recommended that the Uzbek Government exclude the project from the country's Medium-term Economic Development Program. This will mean that in the next five years, Uzbekistan will not start producing the metal required for its innovation-technology projects.

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