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While Chile’s plan to take control of its lithium industry has caused global shockwaves, state-led production of the metal used to make electric vehicle batteries is seen by analysts as likely years away given technical and political challenges.
President Gabriel Boric last week said he would move to gradually nationalize the country’s lithium industry, which holds the world’s largest reserves of the metal, in a bid to boost Chile’s economy.
The plan relies on negotiations with lithium producers, public-private partnerships with technology companies, tense negotiations with political rivals, and the creation of a national lithium company, all of which could take years to accomplish, analysts said.
Chile’s divided Congress, for example, has already stonewalled much of Boric’s progressive agenda, and the government would need support from opposition parties.
“We need projects to be developed as soon as possible if we want Chile to benefit from this (lithium) boom,” said Daniela Desormeaux, director of Chile’s Center for Copper Studies (Cesco), adding that creating the national lithium company is “the most complicated” element of the plan since it requires legislative support.
Economy Minister Nicolas Grau told Reuters earlier in the week that the government wanted to start negotiations with current producers by mid-year and have an agreement before the end of Boric’s term in 2026.
Full cooperation from existing lithium producers Albemarle Corp and is unlikely, with Albemarle already signaling it will keep its contract unchanged until it expires 2043.
“The contract itself is not going to change,” Albemarle’s Chile Manager Ignacio Mehech told reporters after a meeting with Corfo, Chile’s state development office that it currently holds its lithium contract with.
SOURCE:REUTERS
