The leader of the Chilean Mining Council (Consejo Minero) is urging the government to speed up efforts in the lithium industry without relying solely on deals with Sociedad Química y Minera de Chile (SQM) (NYSE: SQM) or Albemarle Corporation (NYSE: ALB).
Chile is the second largest lithium producer after Australia and it is a key player in meeting the demand for electric vehicle batteries. But in recent months, projects have been stuck in the pipeline.
SQM is one of the two lithium producers in Chile and its contract expires in 2030. Given the upcoming deadline, it has been the government’s priority and there have been multiple negotiations with the Chilean state-owned copper miner Codelco but not so much action.
Chilean President Gabriel Boric announced plans this year to only allow public-private partnerships for lithium contracts and appointed Codelco to negotiate with SQM and Albemarle, the only producers in Chile.
The government has outlined goals to offer exploration contracts to private firms in the first half of next year. Boric’s government seeks to have control of the saltflats through public-private affiliations but Villarino says the government is taking too long.
He added that time is being wasted and more can be done to advance lithium projects such as issuing more contracts in other saltflats such as the Atacama saltflat.
Other members of the Mining Council of Chile include BHP Group Ltd (NYSE: BHP), Glencore plc (LON: GLEN) and Anglo American plc (LON: AAL).
Glencore recently signed a deal with Australia’s Galan Lithium Ltd (ASX:GLN) to provide Argentina-produced high-grade, low-impurity lithium chloride once Galan starts production in the upcoming years.
Argentina stepping over as lithium industry leader
Villarino said that its neighbouring country, Argentina, may take over the leadership as a lithium producer if Chile doesn’t step up in time.
The recent president Javier Milei wants to push Argentina’s energy sector forward and that can lead Chile to become a less prominent player in the lithium industry.