Chile, ranked as the world’s second-biggest lithium producer, has set ambitious plans to double its output within the next decade.
This move aims to cater to the soaring demand for electric vehicle batteries and preempt a looming shortage that could escalate prices.
Chile’s Finance Minister, Mario Marcel, highlights the critical risk of underproducing lithium.
This could pave the way for alternative battery technologies, potentially undermining lithium’s key role in the electromobility sector.
The government’s strategy involves opening new salt flats for mining through a novel public-private partnership model, unveiled by Marcel.
This initiative seeks to maintain the profitability and appeal of lithium battery production amidst the global transition away from fossil fuels.
Despite lithium market volatility and price fluctuations, Chile’s proactive approach aims to stabilize supply amid surging EV sales.
A partnership between SQM and Codelco is expected to drive a significant portion of the anticipated increase in lithium output. We also anticipate additional contributions from new mining projects.
President Gabriel Boric’s plan is designed to reverse Chile‘s dwindling market share by relaxing production quotas and strategically categorizing salt flats for mining.
The government plans 3-4 new mining projects by 2026, tackling challenges like water scarcity in Salar de Atacama.
Initially, Boric’s lithium strategy raised industry concerns over an increased state role and the shift towards uncommercialized, eco-friendly extraction techniques.
However, recent clarifications indicate a more flexible approach, allowing private companies significant control over mining projects.
This approach makes advanced extraction methods a preferred, not mandatory, aspect of new contracts.
In short, Chile aims to bolster lithium production to fortify its global battery supply chain position
This effort responds to environmental concerns and market demands while embracing innovative mining technologies.