Chile’s president unveils plan to nationalise lithium supply

Chile’s president Gabriel Boric said on Thursday he planned to nationalise the country’s lithium industry, transforming the landscape for miners in the world’s second-largest producer of the metal crucial to car batteries and other green technologies.

“This is the best chance we have at transitioning to a sustainable and developed economy,” Boric said in a television address on Thursday evening. “We can’t afford to waste it.”

Under the plan, which must be approved by lawmakers, state-owned copper producer Codelco will be tasked with negotiating a way forward with lithium industry giants SQM and Albemarle. 

Boric has been exploring how to attract private investment while asserting control over the supply of materials that underpin the energy transition since he took power in March last year.

New contracts would be approved only if they were controlled by the state, Boric said. Existing contracts will not be terminated, but the state will seek to take a stake in SQM and Albemarle’s contracts to mine the Salar de Atacama salt flat before their licences expire in 2030 and 2043 respectively.

“Any private company, whether foreign or local, that wants to exploit lithium in Chile must partner with the state,” Boric added.

Chile is the latest in a series of countries to seize greater control over key mineral resources, after Mexico nationalised its own lithium last year and Zimbabwe banned unprocessed lithium exports. Indonesia is curbing exports of commodities including nickel ore, which is used in batteries.

Chile holds vast lithium reserves in the Atacama desert, but has been losing market share to countries such as Australia and Argentina. It plans to set up a lithium institute and promote domestic lithium processing rather than simply sending semi-processed material overseas.

Chile’s constitutional assembly last year rejected plans that would have given the state exclusive mining rights over minerals including lithium.

Boric said he would seek approval from Chile’s congress for the fresh plan in the second half of 2023.