Chilean government announces a plan to nationalise its domestic lithium industry, including existing operations in the Salar de Atacama

On the 20^th April, President Boric of Chile announced plans to move all lithium production within the country to either total or joint state ownership. Chilean state owned mining company CODELCO is tasked with managing the development of a state-owned lithium company, which will present plans to the Chilean Congress later in 2023. In addition to CODELCO’s involvement, Chilean state-owned Enami will also be given exploration and extraction contracts for lithium in Chile prior to the settling up of a specialised Chilean state lithium company.    

The nationalisation of the Chilean industry would include the partial or complete transfer of operations at SQM and Albemarle’s respective Salar de Atacama operations to a Chilean state-owned entity, though the Chilean government has stated that current production contracts will be honoured. This would ensure SQM’s operation until 2030 and Albemarle’s until 2043, though President Boric suggested earlier state ownership opportunities would be explored. 

Approval by the Chilean congress could prove a barrier to the nationalisation plan however, with the government and Congress not seeing eye to eye on earlier legislation such as the Chilean government's proposed tax reform which was rejected by Congress in March 2023. If successful though, the amalgamation of Chilean production under one state-owned company would create a new lithium major, which would have accounted for over 31% of global lithium production in 2022. Increased state involvement in the lithium industry does raise concerns, however, with greater potential for geopolitical disruption and increasing polarisation of global markets.