Chilean President Gabriel Boric announced plans to nationalise the country's lithium industry, the world's second-largest producer of the metal crucial for electric vehicle (EV) batteries.
The move will eventually transfer control of Chile's lithium operations from industry giants SQM and Albemarle to a state-owned company. This decision poses a new challenge for EV manufacturers seeking battery materials, as more countries aim to protect their natural resources.
Boric stated that future lithium contracts would be issued as public-private partnerships with state control, but current contracts would not be terminated.
SQM's contract is set to expire in 2030 and Albemarle's in 2043, both of which supply EV and battery manufacturers, including Tesla Inc (NASDAQ:TSLA) and LG Energy Solution. The announcement is expected to push future investment in lithium towards other countries, such as Australia, the world's largest producer.
State-owned copper producer Codelco will be responsible for determining the best approach for a state-owned lithium company, with Boric seeking approval from Congress for the plan later this year.