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Chile would move to establish a state-owned company to oversee the entire production cycle of the critical mineral, Boric said.
“It is the best chance we have to move toward a sustainable and developed economy,” Boric said. “We cannot afford to waste it.”
The move was intended to ensure that the country could expand its lithium production in a sustainable manner, he added.
Lithium demand was expected to increase, with various countries pushing ahead in their efforts toward decarbonization and electrification, and Chile plays a key role in that supply chain, he said.
Mined lithium in Chile makes up about 30% of global supply, second only to Australia, according to the US Geological Survey. It also has the world’s largest known reserves of lithium, at 9.3 million tonnes, also according to the USGS.
Fastmarkets researchers have forecast demand to rise to 1.2 million tonnes of lithium carbonate equivalent (LCE) in 2024, from an estimated 964,000 tonnes this year. They also forecast a deficit of around 88,950 tonnes of LCE in 2024.
“Our challenge is for our country to become the main lithium producer in the world, thus increasing its wealth and development, distributing it fairly while protecting the biodiversity of the salt flats,” Boric said.
The nationalization plan will be put through the country’s congress in the second half of this year, he added.
Boric also said that the plans would respect current lease agreements in place with lithium producers in the country.
“The state of Chile will fully respect what is established in the current contracts,” Boric said. “In other words, any state participation in the Salar de Atacama will be the result of an agreement with those who currently have the rights to exploit lithium.”
State-owned copper miner Codelco was instructed to help carry out the nationalization. “If a public-private company is formed to exploit lithium from the Salar de Atacama, it will be controlled by the state through Codelco,” Boric said.
Chilean lithium producer SQM, which has most of its lithium carbonate production in Chile, holds its lease – which will run until 2030 – through the Chilean economic development agency CORFO. US based lithium producer Albemarle’s lease with CORFO will run until 2043.
The government’s plan also intended to bring more development further down the lithium supply chain into Chile.
“This implies making an additional effort to not only extract raw material, but to convert it into new products of high technological value,” Boric said. “We can do this in Chile. In this area, we hope to have the participation and leadership of the regional governments [in the country].”
Some market participants saw the nationalization plan as having the potential to impede further foreign investment into production in the region, but the news had little effect on spot prices.
Lithium prices globally remained subdued despite the news, driven by weak demand for electric vehicles in China.
The lithium carbonate, 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, were assessed at $28-30 per kg on Friday, flat compared with the previous session but down from $78-80 per kg at the beginning of the year.
Fastmarkets assessed the lithium hydroxide monohydrate LiOH.H2O, 56.5% LiOH min, battery grade, spot price, cif China, Japan & Korea, at $38-43 per kg on Friday, unchanged from the previous session but down from $83-84 per kg at the start of the year.
On the Chicago Mercantile Exchange, lithium hydroxide forwards were recently trading at $43-44 per kg for May and June.
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