Chile’s Lithium Nationalization in Full Swing

The Government of Chile aims to establish a model for its state lithium firm by the end of this year. Chile is the world’s second largest lithium producer, with its domestic industry dominated by two private mining companies, Albemarle and SQM.

The government of newly-elected President Boric, like the administrations of Mexico and Argentina, wants to be more involved in the production of lithium, which has seen prices soaring over the last year.

Chilean Mining Minister Hernando said a specialized group was being installed to explore the best way to operate the company.

Hernando said the government hopes to have the proposal for how this company will operate as an institution and the business model in which it will work before the end of the year.

She also underlined that the government was open to the participation of private capital in the firm, but the State of Chile would act as the main shareholder.

During his election campaign, President Boric, who took office in March, said it would be a “historic mistake” again to privatize resources. He reiterated his interest in creating the company for the development of lithium.

Hernando added that lithium would not be included in the plans to apply a mining royalty, as part of an ambitious tax agenda promoted by the government.

She added that a mining royalty for lithium would be complex as the industry is not very mature.

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