Boric announces plans for Chile's lithium

CHILE - In Brief 23 Apr 2023 by Robert Funk

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In a nationally televised address to the nation on Thursday evening, President Gabriel Boric announced his much-awaited plan for the future exploitation of Chile’s vast reserves of lithium. The Boric plan has five main elements: The creation of a national lithium company, with the goal of having the state be an active part of the entire production process. These steps – exploration, exploitation and added value – will also involve public-private partnership. New technologies will be explored with a view towards reducing the environmental impact on the salt flats where lithium is harvested. One third of the total lithium-producing surface will be protected. Community consultation The state will seek to add value by promoting the generation of lithium-related products. The president stressed that he is open to further ideas and negotiation. He has no choice. He knows that the creation of a national lithium company would require a 4/7 majority in Congress, something he is unlikely to get. In the meantime, then, the president announced that the state will respect existing contracts, such as the lease of the Atacama salt flats, which run out in 2030 and 2043, while also trying to renegotiate with the lease holders in order for the state to obtain a majority share in the operations through Codelco. Indeed, all future public-private partnerships would also require the state to control at least 50.1%. Why these companies would agree to such a renegotiation is an open question. The vague nature of the announcement left the markets perplexed. For example, what is the government thinking with respect to the future national lithium company’s corporate governance? How politically i...