Chile may nationalize its lithium industry, said President Gabriel Boric in an announcement this week. In a televised news address Thursday, Boric stated that the move was an opportunity for national economic growth that would be difficult to beat in the short term.
“The objective of this national strategy is to increase the wealth for the country, developing a key industry as a fundamental step to link the economic development of Chile with the change towards a global green economy,” says the Chilean government’s website.
Chile is the world’s second-largest lithium producer of lithium and hosts the planet’s largest reserve. The lithium triangle spanning across Chile’s Atacama Desert, Bolivia and Argentina contains approximately 54 per cent of the world’s lithium reserves, according to data from the United States Geological Survey.
In time, the move will transfer control of domestic lithium operations in Chile from the major industry players Sociedad Quimica y Minera de Chile (NYSE: SQM) and Albemarle Corporation (NYSE: ALB) to a state-owned company.
The country’s state-owned copper miner Codelco will be responsible for finding partners for new contracts to start with prior to that role eventually being transferred over to the future state-owned lithium operator.
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Mexico also nationalized its domestic lithium deposits last year and agreed to make the country’s energy ministry responsible for the reserves this February.
In early March, Iranian authorities claimed to have discovered the second-largest lithium deposit on earth, dwarfed only by Chile’s lithium reserve in the Atacama Desert.
A March report from the French market researcher Report Linker indicated that the global lithium market would be worth US$22.6 billion by 2030, ascending to that value at a compound annual growth rate of 15.7 per cent.
The market was only worth approximately US$7 billion last year.
rowan@mugglehead.com
