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Chile releases National Strategy For Lithium; plans to nationalize the industry

An aerial view of large evaporation ponds at the Salar de Atacama [geometric shapes at the bottom right] – Chile’s largest salt flat. At about 3000 sq km, it is the world’s third-largest salt flat as well as one of the largest active sources of lithium. Image courtesy: European Space Agency.

Chile's President, Gabriel Boric recently announced the government's National Lithium Strategy asserting that the State will be present throughout the lithium production cycle and will seek to promote scientific and technological development within the industry.

President Boric announced the details of the government's National Lithium Strategy from the Huanchaca Ruins Cultural Park in Antofagasta and stressed that the government wanted Chile to be the biggest lithium producer in the world.

"The lithium industry has to be at the service of the people, and not the people at the service of the industry... for this reason, it is essential ... that the State be present throughout the lithium production cycle," said President Boric.

Following the participatory process, the government will be sending a bill to Parliament to create a National Lithium Company and a Chilean Economic Development Agency (CORFO) Committee on Lithium and Salt Flats, to ensure their sustainability in the medium and long term, he added.

"We want to do this – and I really want to insist on this – with the participation of local communities and indigenous peoples, with high standards of environmental protection. Environmental protection standards – for example, what the Environmental Assessment Service (SEA) does today – are not an obstacle to development, as the director of the SEA constantly reminds us; they are a condition for development," he stated.

With the shift to the latest model, the newly created National Lithium Company (100% state-owned entity) will be in charge of exploiting the salt flats under a public-private partnership wherein the State will act as the controller of the business. Meanwhile, President Boric confirmed that the Government of Chile would fully honor all the existing contracts.

The creation of the new public company will require approval from Congress, however, in the meantime, two State-owned copper companies Codelco and Enami will take the lead on figuring out how the public-private-partnership model will operate.

Speaking of scientific development in terms of adding value to production and avoiding only the raw material being exported, President Boric expressed the desire to encourage public-private partnerships to promote scientific and technological development, such as the research carried out by the Universidad de Antofagasta at their Advanced Research Center for Lithium and Industrial Minerals. 

"Our commitment is to scientific and technological development because we want Chile to be the biggest lithium producer in the world; but to get there by producing and adding value to lithium, generating productive chains, and technology transfers, training our people, understanding that our wealth is not only in the land, but also in the knowledge that we generate and in the value that we add to the products we extract," he explained.

Lithium is a key battery material used in the cathodes of all types of lithium-ion batteries. In the past few years, the demand for lithium has grown significantly due to the growing demand for electric vehicles. As the demand for electric /hybrid cars, energy storage systems, and other electronic goods powered by lithium-ion batteries grows, the demand for the metal [lithium] is expected to intensify further. 

Currently, Chile is the second largest producer of lithium in the world. More recently, a broader wave of nationalization of lithium is being observed in the "Lithium Triangle" -- a region that spans Chile, Argentina, and Bolivia and holds 75% of the world's lithium supply in their salt flats. The governments of these countries are calling for greater public sector stake in the mining of the critical metal [lithium] and are also shaping policy to support the battery sector.

Author : Shraddha Kakade
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