Chile: President Boric unveils plan to nationalise lithium industry critical for electric mobility

Chile will begin nationalising its lithium industry, President Gabriel Boric announced on Thursday. The country will create a state-owned company to produce the rare metal which forms a key component of electric vehicle batteries. President Boric said that the nationalisation of lithium production would entail stricter environmental rules.

The lithium plan will require approval in congress in Santiago. The plan is likely to be debated in the second half of the year.

In a television address in which President Salvador Allende's 1971 nationalisation of copper was mentioned, Boric said "the state will participate in the whole [lithium] production cycle and create a National Lithium Company to do so."

President Boric also called for development of value-added lithium products in Chile.

The South American country holds the world's largest lithium reserves and is the world's second-largest producer of lithium, also known as White Gold.

Chile is the latest among a number of countries that have taken steps for greater control over mineral resource. Mexico, too, nationalised its lithium industry last year.

The mining of lithium in Chile is a water-intensive process.

The Chilean president said that future mining projects will move ahead after consultation with local communities in a way that water consumption for the mining process is minimal.

"These salt flats are not just lithium," he said. "They are people, they are communities, they are water in the desert, they are the home of cultures thousands of years old," he said.

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Two lithium miners, namely, Chile's SQM and the US company Albemarle mine country's lithium reserves and their contracts run to 2030 and 2043 respectively. President Boric said that duration of these contracts would be respected.

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Once the lithium plan is passed through congress, the two miners, however, will have to negotiate an unspecified state participation in their currently ongoing mining operations.

"This is the best chance we have at transitioning to a sustainable and developed economy," Boric said in his Thursday's address. "We cannot afford to waste it."

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