On 2 March, Chile's Minister of Finance, Mario Marcel, announced a target to have three or four new lithium projects operational by 2026 during a meeting with US Treasury Secretary Janet Yellen. Her visit aims to understand Chile's national lithium policy and might drive substantial expansion of US’s purchases of raw materials from Chile.
Currently, there are only two lithium producers operating in Chile, Albemarle and SQM. The government is seeking public-private partnerships with Chile's state-owned mining company, Codelco, chosen to represent the state in the new public-private model for lithium. Marcel has made clear that Chile's lithium policy seeks no dominance from specific countries, and would like to see diverse international investments while ensuring sustainable and equitable resource development.
Parallelly, on 29 February, the European Parliament approved the EU-Chile Advanced Framework Agreement, which promises a better access to critical raw materials like lithium. For example, both parties recognise the need "to accelerate the deployment of renewable and low carbon energy sources" and a better-established procedure to grant authorisation for exploration and production of energy goods and raw materials. This agreement can be traced back to December 2022 when the European Commission and Chilean government reached a preliminary understanding of cooperation emphasizing trade liberalization and geopolitical alignment.
These engagements signify the growing importance of Chilean lithium on the global stage, reflecting a collective Western effort to reduce dependency on Chinese raw materials while securing a place in the supply chain for critical minerals.
Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market
Email: lilysu@smm.cn
