Major lithium-producing country to nationalize reserves

Chilean President Gabriel Boric has announced that the nation’s vast lithium industry will be brought under government control in an effort to boost the economy and protect the environment.

Future lithium contracts will only be issued as public-private partnerships with state control, Boric explained last week, noting the government would not terminate current contracts, but that companies should be open to state participation before their contracts expire.

“This is the best chance we have at transitioning to a sustainable and developed economy. We can't afford to waste it,” the Chilean leader said during a televised address to the nation.

Chile holds the world’s largest lithium reserves and is the second largest producer of the metal globally. Lithium-ion batteries are vital for most consumer electronics and electric vehicles (EVs). Moreover, lithium is deemed to be a “pillar for the fossil-fuel free economy” by the United Nations, seen as the primary way to store energy in the clean power grids of the future.

The Chilean government’s move comes as a new challenge to global EV manufacturers, who have been scrambling to secure battery materials amid countries’ attempts to protect their natural resources.

In neighboring countries of the Lithium Triangle – Chile, Argentina and Bolivia – governments have been also looking for a greater public sector stake in mining of the metal, with plans to develop their own lithium battery sector.

Elsewhere, Mexico nationalized its lithium deposits last year, and Indonesia has banned exports of nickel ore, which is also a key battery material.

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