Chile's Boric announces plan to nationalize lithium industry

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STORY: Chile is going to nationalize its lithium industry, the world's second largest producer of the metal essential in electric vehicle batteries.

President Gabriel Boric announced the shock move in a televised address on Thursday, saying it’s the country’s best chance at “transitioning to a sustainable and developed economy.”

“Chile has one of the largest lithium reserves of the world. It is a mineral that, being in electric bus and car batteries, is key in the fight against the climate crisis, against climate change. This is an opportunity for economic growth that will be difficult to beat in the short term.”

The announcement poses a fresh challenge to EV makers scrambling to secure battery materials, as more countries look to protect their natural resources.

Mexico nationalized its lithium deposits last year, while Indonesia banned exports of nickel ore, a key battery material, in 2020.

Boric’s plans, for public-private partnerships managed by the state, mean control of Chile's vast lithium operations would in time be transferred from industry giants SQM and Albemarle to a state-owned company.

Albemarle said the announcement would have "no material impact on our business", while SQM was not immediately available for comment.

Boric said he would present his plans to Congress in the second half of the year.

“We’ll send a law proposal to create the National Lithium Company to Congress. It will look for partners to develop value-adding projects. This implies making an additional effort to not only extract raw materials, but to convert them into new products with high technological value. We can do it in Chile.”

Congress has to approve these plans.

It has been a check on many of Boric's more ambitious proposals and shelved a tax reform bill in early March.