2023-04-23 10:08:50
On Thursday, April 20, the president of Chile, one of the world’s largest lithium producers, Gabriel Boric announcedthat lithium mining activities are nationalized in the country. Lithium is a raw material especially needed in batteries, especially in electric car batteries. Nationalization aims to strengthen environmental protection and strengthen the Chilean economy. With the decision, Chile’s lithium mining operations will be transferred from mining giants SQM and Albemarle to a state-owned company.
The transition will take place in Chile’s lithium mines not long ago
According to many, the situation will make it difficult to manufacture electric cars. After all, more and more countries are deciding to take over key natural resources. For example, Mexico nationalized its lithium mines last year, and Indonesia banned the export of nickel in 2020. In the future, even in Chile, mining contracts will only be issued if the activity is carried out in a state-controlled partnership. There is no point in talking about immediate effects. Boric stated that the contracts currently in force will not be fired, but they will not be allowed to be renewed.
Albemarle, the world’s largest lithium producer, has a contract that expires in 2043, and SQM’s contract expires in 2030. The government trusts that otherwise, both companies will be open to entering into a partnership with the Chilean state even before the expiration date. So far, only general statements have been released by the two companies, according to which the decision has no effect on their business. However, this will certainly improve the situation of countries that have large lithium reserves and whose mining activities have not been nationalized – such as Australia. In Chile, the state-owned company Codelco was entrusted with the creation of the state-owned lithium company. And they will also receive the new exploration and extraction permits in the future.
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