Chile’s public-private model attracts more than 50 lithium miners

More than 50 global companies are actively pursuing lithium deals under Chile’s new public-private model for the sector. Traditionally, US-based Albemarle and Chile-based Sociedad Quimica y Minera de Chile (SQM) have dominated the Atacama salt flat, which accounts for 30% of global lithium production. The new model proposed by President Gabriel Boric involves the state having a controlling stake in strategic operations, while private firms retain control of non-strategic projects. The government also plans to negotiate with Albemarle and SQM for larger stakes in their existing contracts, overseen by state-owned copper producer Codelco.

President Boric sees Chile’s lithium reserves as a significant opportunity for economic development and sustainable growth. However, his plan requires approval from the National Congress of Chile, where he lacks a majority, meaning potential changes before approval. Boric’s government aims to establish a new national lithium company through legislation, which could take a substantial portion of his four-year term.

Under the proposed policy, private entities can participate in the lithium industry, but only as minority partners in joint ventures with the State. This approach aims to incentivize the exploration of other salt flats in addition to the Atacama, diversifying lithium sources and expanding production.

SQM, in particular, faces risks, as its contract for extracting lithium in the Atacama salt flat expires in 2030. While Boric assures that existing contracts will be respected, the balance between competing interests remains unclear.

Chile’s push for state control in key sectors reflects a broader wave of nationalization and protectionism in Latin America, exemplified by Mexico’s reforms in the energy and power sectors. While these measures aim to secure national interests, they also raise concerns about maintaining a balance between economic growth, foreign investment, and local development.

Elevate your business with QU4TRO PRO!

Gain access to comprehensive analysis, in-depth reports and market trends.

Interested in learning more?

Sign up for Top Insights Today

Top Insights Today delivers the latest insights straight to your inbox.

You will get daily industry insights on

Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Biden, Xi scheduled to meet in the U.S. on Wednesday

U.S. President Joe Biden and Chinese leader Xi Jinping are scheduled to meet for the first time in a year, with talks set to cover a range of critical issues, including military conflicts and the role of artificial intelligence. The meeting, taking place on the sidelines of the Asia-Pacific Economic…

EU set to open third joint gas buying round next month

The European Union (EU) is set to launch its third round of joint gas buying next month, as the bloc continues its efforts to secure gas supplies in anticipation of another winter with limited Russian gas availability. The collective gas buying initiative was initiated this year as a response to Russia reducing gas deliveries in 2022 following its invasion of Ukraine. The scheme involves gathering gas demand from companies, seeking offers from global gas suppliers, and matching buyers and sellers. The EU aims to fill storage caverns ahead of winter and leverage the collective market clout of EU countries to avoid competition that could drive up gas prices.

Concerns over China’s economic outlook linger, financial leaders express skepticism

Asia’s top financial executives anticipate that geopolitical tensions, uncertainties related to the upcoming U.S. election, and policy ambiguity from Beijing will continue to undermine investor confidence in China throughout 2024. Despite China’s efforts to employ policy measures to stabilize…

Stay informed

error: Content is protected !!