Chilean legislators reject lithium expropriation

Soquimich (SQM) lithium mine on the Atacama salt flat, the world’s second largest salt flat and the largest lithium deposit currently in production, with over a quarter of the world’s known reserves, in northern Chile. (Image courtesy of SQM)

Chilean legislators have rejected a bill allowing the expropriation of private companies involved in lithium mining in the country, which would have left the door open for the state to take over firms such as Albemarle and SQM, the world’s No. 1 and second largest producers of the battery metal.

The special committee of the lower house said the bill was unconstitutional, but tied when it came to vote in favour of naming lithium a resource of national interest. The metal, a key ingredient in the batteries that power electric vehicles (EVS), already has a special status, as it is considered to be property of the state.

Lithium is already a resource that belongs to the Chilean state

“Declaring the Special Contracts of Lithium Operation (CEOL) deals of national interest is what was declared unconstitutional,” the minister of mining, Baldo Prokurica, told

“The only special lithium operation contract Corfo has is one with Codelco. Sometimes it is confused with the contracts that Corfo has with SQM or Albemarle, which are lease contracts,” he noted.

Since re-assuming power in 2018, Chile’s President Sebastian Piñera has vowed to ensure a combination of both state and private investment to double the country’s output to 230,000 tonnes of lithium carbonate equivalent per year by 2023.

Chile produced 96,053 tonnes of lithium last year. Demand from EVs and energy storage systems is expected to triple by 2025.

Most analysts, however, remain unconvinced. Commodity Research Group (CRU) said last month it expected lithium prices to remain in the single digits for longer than expected, as “hype” has met “reality.”

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