Chile Unveils Public-Private Model to Share Vast Lithium Riches with Mining Industry – by James Attwood (Bloomberg News – April 20, 2023)

(Bloomberg) — Chile delivered its long-awaited lithium policy late Thursday, giving the state a majority stake in all new contracts and sending shares in the two current producers in the South American nation — SQM and Albemarle Corp. — tumbling.

While the government will respect existing arrangements with the two companies, both would move to the state-controlled model once contracts expire in 2030 and 2043, respectively. Alternatively, they could opt to give up a majority stake in their operations before then. SQM shares were down a record 20% at 3:35pm in New York, while Albemarle lost 10%.

President Gabriel Boric’s left-leaning administration is seeking a bigger role for the state in a metal that’s critical to the clean-energy transition. Chile is currently the world’s No. 2 supplier of the battery metal. The new framework is an attempt to attract more private capital, defend the environment and move further down the value chain, all at the same time.

It’s a big ask and an important balance to strike for the Chilean economy, the global lithium market and the transition away from fossil fuels.

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