Chile to make lithium projects state-led public-private ventures

Chilean president Gabriel Boric last week announced the country’s national lithium strategy, which will put the state in control of the production of the key material for electric vehicle batteries and standalone energy storage.

Existing contracts with lithium producers currently operating in Chile will be respected, but in the future, the state-owned lithium company will lead public-private partnerships with arriving players. Until Congress approves the creation of such a company, state-owned miners Codelco and Enami will represent the Chilean state in joint initiatives with the private sector, the government said.

“Lithium presents us with a great opportunity for development that we cannot miss and we have to do it differently than we have done before,” Boric said.

The goal of the new model is to have Chile develop the entire lithium cycle in the country, from extraction to producing value-added products, instead of just being an exporter of raw material.

At present, lithium is extracted in the Atacama salt flats, and lithium production in Chile accounts for over 30% of the global market, the president said. He highlighted the need for sustainable mining in Atacama and new exploitation areas and engagement with local communities, all of which the national strategy is designed to bring.

Riches from the lithium mining would help finance public projects, such as schools, hospitals and roads, according to the government.

Albemarle Corporation (NYSE:ALB) and Sociedad Quimica y Minera de Chile (NYSE:SQM) currently operate lithium production in Chile, with their contracts expiring in 2043 and 2030, respectively, according to a Reuters report. Codelco has been tasked with approaching both companies and invite them to switch to the public-private model before their contracts expire.

In response to the announcement, SQM said it was still analysing the text of the strategy. Albemarle expects no material impact on its business, Reuters reported.

Choose your newsletter by Renewables Now. Join for free!