Chile has followed in the footsteps of Mexico and confirmed plans to nationalise its lithium resources through a public-private collaboration approach, Kallanish reports.

President Gabriel Boric told Chileans in a televised statement on Thursday that lithium offers a “historic opportunity” for the country’s development and prosperity. Unveiling its national lithium strategy, the head of state said private companies will contribute capital, technological innovation and market network, while the state ensures the sustainable and profitable development of such critical material.

Through a national lithium company, the government will be involved in the entire value chain of its lithium salts. The aim is to unlock exploration expertise and investment but secure the production of value-added products, going beyond upstream.

President Boric plans to submit a bill to Congress to create the lithium company in the second half of the year. In the meantime, it has instructed economic development agency CORFO to ensure state copper mining companies Codelco and Enami play a key initial role in the collaboration with private firms.

He said Chile is a reliable partner and will respect all existing contracts with lithium developers. However, it will try to reach an early agreement to enable state participation in the Salar de Atacama operations before an important part of the lease expires in 2030.

The Salar de Atacama is the largest salt flat in Chile and one of the biggest reserves of lithium in the world, covering around 30% of global supplies. Yet, Boric highlights the country has further potential with over 60 salt flats.

Prospecting of other salt flats will start with an exploration and exploitation tender process organised by Enami and Codelco. This will be done through joint ventures, and in areas of relevant significance, the state will hold a majority stake.

The national lithium strategy will help Chile to become the main lithium producer in the world, the president says. It will promote the sustainable exploration of resources, respecting local communities and biodiversity of the salt flats. Direct lithium extraction (DLE) is likely to be the leading technology for future brine exploration, minimising environmental impact, he adds.

“The high global demand, the high prices and the large lithium reserves in our country allow us to be optimistic and, at the same time, call us to act with a sense of urgency,” says President Boric. “This is good news for the country.”

Following the announcement, shares in SQM and Albemarle, the two companies producing lithium from the Salar de Atacama, fell by 10% and 8%, respectively.