Chile, the world’s second-largest lithium producer after Australia, has launched the National Lithium Programme to position itself as the leading global producer of lithium. President Gabriel Boric announced the initiative, aiming to create a state-run lithium company that will oversee, expand, and manage the country’s lithium industry. The move comes in response to the surging demand for lithium, driven by the global transition to green energy and the increasing use of the metal in electric vehicle batteries and mobile phones.
Chile, along with Bolivia and Argentina, forms the lithium triangle, contributing to about 60% of the world’s known lithium reserves, with Chile currently being the largest producer. The country’s lithium industry gained momentum as lithium prices skyrocketed from $14,000 per tonne to over $80,000 in November 2023, driven by its essential role in batteries.
President Boric emphasized the need for Chile to lead in lithium production while ensuring the conservation of biodiversity in the salt flats. The National Lithium Programme outlines plans for a state-controlled lithium company, with the government holding 50.01% of shares in joint ventures with private investors. Existing contracts will be respected, but new agreements must adhere to environmental sustainability, improved labor conditions, and consultations with Indigenous communities in the Atacama Desert region.
The program also includes the establishment of a national lithium institute to explore value-added derivatives, leveraging Chile’s capacity to produce compounds like lithium carbonate and lithium hydroxide. Jose Miguel Benavente, vice president of CORFO (Chile’s economic development agency), highlighted the potential for increasing the value of lithium through further refining processes.
The announcement has sparked mixed reactions, with some conservative politicians expressing concerns about returning to a nationalized industry akin to the era of former socialist President Salvador Allende. The constitution already designates lithium as a strategic and exclusively state-owned mineral due to its potential use in nuclear fusion.
President Boric acknowledged potential apprehension from the private sector and conservative economists but emphasized the goal of generating well-being for the people of Chile. The final bill to establish the national lithium company is expected in the second half of the year, with CODELCO, the state-owned copper company, temporarily overseeing the initiative. Foreign companies have already expressed interest in investing in Chilean lithium, signaling significant global attention to the country’s lithium resources beyond the renowned Atacama Salt Flats.
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