Chile may miss out on the lithium price boom if it cannot set policy to allow development of its vast reserves. With lithium prices soaring through most of 2021 and 2022, major miners have been eyeing Chile as a potential new source of the white metal.
But Chile has been flailing for half a decade to create a legal framework to sell concessions to developers to extract its 19.9 million tonnes of lithium reserves, according to S&P Global Market Intelligence data, and the country has only issued a handful of permits.
Chile is mired in a constitutional rewrite that must be finished before new policy can be created. The country is expected to vote on a final draft in September, after which the government can begin to write policy. By the time the necessary framework is in place, the country may have missed the lithium boom. The CIF North Asia price for lithium carbonate peaked in April and has since leveled off, according to S&P Global Commodity Insights data.
“If Chile wants to maintain its market share and leverage the creation of added value, it must focus on production but also make the leap in research and cutting-edge technology developments,” Sergio Bitar told Commodity Insights.