Chile candidate vows to create state lithium firm

  • Market: Metals
  • 01/12/21

Chile's leading presidential candidate Gabriel Boric is pledging to create a state-owned lithium company, potentially diverting strategic growth away from private-sector producers, Chile's SQM and US firm Albemarle.

"Chile cannot again commit the historic mistake of privatizing resources and for that we will create the National Lithium Company, generating jobs in their reservoirs and a Chilean seal on the product," Boric said on social media today during a campaign visit in northern Chile's mining territory.

Boric, a leftist former student activist allied with Chile's Communist Party, is leading his conservative rival José Antonio Kast in polls heading into a 19 December run-off.

Kast and Boric were the first and second top vote-getters in 21 November presidential elections.

Critics of Boric's lithium proposal say the Chilean state already plays a role in the sector through state-owned copper mining company Codelco, which has undeveloped lithium licenses.

Although the proposal was part of Boric's original platform along with other state-owned initiatives, the candidate has been moderating his proposals since last month's elections in an effort to win over centrist voters. Today's tweet suggests he is not backtracking as far as Chile's business community is hoping to see.

Boric also wants to establish a national green hydrogen company, highlighting his vision of a state-led energy transition.

The candidate secured most of his votes in Santiago, and is now hoping to add the northern votes of surprise third-place candidate Franco Parisi, who campaigned from abroad because of legal problems at home. Northern Chile, mostly covered by the Atacama desert, is the heartland of copper mining and, increasingly, solar energy.

DC cameo

Kast, an advocate of small government and head of a right-wing splinter party, is currently in Washington where he participated today in a closed-door roundtable discussion at the Inter-American Dialogue (IAD), a centrist thinktank. He also met with conservative US senator Marco Rubio.

IAD said it is seeking to hold a similar event with Boric.

Lithium is a considered a strategic mineral for the global transition away from fossil fuels because it is used in electric vehicles (EVs). Chile is already the world's top copper producer.

SQM, the largest global lithium producer, is expanding capacity at its facilities near Antofagasta to meet growing demand from increased EV production and sales, particularly in China and Europe. It expects lithium demand to grow by around 50pc in 2021.

Also present across multiple countries is Albemarle. In Chile its lithium carbonate production began at the 40,000 t/yr La Negra III and IV plants, with commercial sales to begin in first half 2022.


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