Chile
News

The national and regional challenges for Chilean lithium

Bnamericas Published: Tuesday, April 19, 2022
The national and regional challenges for Chilean lithium

Chile's lithium industry is growing, but there are some significant challenges to overcome before the segment can fulfill its potential and become a major contributor to the national economy. 

In a speech at the forum Lithium Perspectives in Latin America, hosted by Bolivia's hydrocarbons and energy ministry, Chilean mining minister Marcela Hernando pointed to the importance key role of mining in the national economy, saying that the industry accounts for more than 10% of GDP and over 50% of exports, mainly thanks to production of copper, iron and lithium.

With regard to its burgeoning lithium industry, the country has 18 salt flats with significant lithium potential, with those in the Atacama region the most relevant and best-explored, thought to contain around 90% of Chile’s lithium reserves and currently hosting operations by private companies SQM and Albemarle.

Lithium exports generated some US$772mn in the first 10 months of 2021, with Hernando illustrating its impact on the country's foreign trade by underlining that export growth of the soft white metal in 2010-20 was three times that of other important export products like salmon, wine or iron ore. 

Although lithium is now making a significant contribution to the national economy, it is still a long way behind the value generated by copper exports (which reached US$38bn in 2020). However, forecasts are that lithium exports will climb to around US$1.8bn by 2025, as world demand for the metal quadruples by 2030, mainly driven by the boom in electric mobility.



The national challenges for the lithium segment include conducting more exploration and developing the value chain in the country, in particular, but there are various others that can pave the way for greater development. 

The minister mentioned certain proposals for the industry that were generated by a committee established in 2014 under the second government of Michelle Bachelet and recently adopted by new President Gabriel Boric, such as considering lithium a strategic mineral that cannot be awarded in concessions and strengthening the role of the state as the owner of the mineral resources. 

She also underlined other priorities for the lithium agenda:

  • Promoting a sustainable natural resource-based economic model, from mineral extraction to efficient revenue management.
  • Promoting policies focusing on Chilean mining's commitment to reducing environmental impact and with a view to supporting harmonious community relationships.
  • Promoting a new state-led lithium management plan, encouraging the participation of industry, academia and the communities. 
  • Promoting research and innovation focused on adding value to the upstream and downstream value chains. 
  • Creating a state-owned lithium company.
  • Enhancing human capital and technical expertise with knowledge of lithium.
  • Establishing a basic and applied research center or institute for studying new extraction methods and advanced materials. 

At the regional level, the mining minister stressed the importance of thinking regionally about the Latin American lithium triangle (Argentina, Bolivia and Chile), which together account for an estimated 58% of the world’s lithium resources, according to the 2021 USGS Mineral Commodity Summary.

This was also highlighted by Jeannette Sánchez, head of the natural resources division of the UN Economic Commission for Latin America and the Caribbean (ECLAC), who also took part in the forum. 

She emphasized the importance of implementing regional policies to regulate the lithium industry in order to collect more revenues, address the challenges of increasing global demand for lithium and also help deal with current Latin American economic slowdown.

Photo credit: Universidad de Chile

Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects

Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.

  • Project: Ana Paula
  • Current stage: Blurred
  • Updated: 3 hours from now
  • Project: Dominical
  • Current stage: Blurred
  • Updated: 3 hours from now

Other companies

Get key information on thousands of companies in Latin America, from projects, to contacts, shareholders, related news and more.

  • Company: Neogreen Hydrogen Corporation  (NeoGreen)
  • The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
  • Company: AUTPRO Elétrica e Automação Ltda.  (AUTPRO)
  • The description contained in this profile is taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been machine tran...
  • Company: KBR Inc.  (KBR)
  • KBR, formerly Kellogg Brown and Root, is an engineering, procurement, construction and services company serving the markets of aerospace and defense, energy and chemicals, intel...
  • Company: BMI S.A.  (BMI Constructora)
  • The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...