澳门六合彩

Chile鈥檚 lithium industry is at a crossroads. At stake is Chile鈥檚 future as one of the world鈥檚 leading lithium producers, and whether the Andean nation will continue to play a central role in the planet鈥檚 transition from fossil fuels to electrification. There is much debate in Chile on the role of the state in the lithium industry and the best approaches to protect the environment and local communities.

Lithium production in Chile鈥檚 Atacama desert made Chile a lithium powerhouse. The country produced 26 percent of the world鈥檚 lithium in 2021, and the Atacama holds the world鈥檚 largest reserves, 9.3 million tonnes. Chile is the world鈥檚 number one producer of high-quality lithium from brines, and second biggest producer overall after Australia, which produces lithium from rock. Chile is also the world鈥檚 top producer of copper, , and holds in its southern regions.

In recent years, Chile鈥檚 lithium sector has been losing market share. Australia surpassed Chile in 2017, and Argentina has been catching up. Investment has been flooding into lithium projects given high prices and projections that global demand will be 40 times higher by 2040. Still, Chile remains competitive, with high quality, low-cost lithium extracted by two major producers, U.S.-based Albemarle and Chilean SQM, responsible for of investment last year alone.

Chile remains competitive, with high-quality, low-cost lithium extracted by two major producers, U.S.-based Albemarle and Chilean SQM.鈥�

The election of President Gabriel Boric in 2021, Chile鈥檚 unresolved constitutional reform process, and policy debates about the future of the mining sector have led to uncertainties about the legal and regulatory environment for Chile鈥檚 lithium industry. Soon, however, the government is expected to publish a national lithium strategy. The document should clarify the role of the government and private enterprises in the industry, and how Chile will balance economic, environmental and social objectives.

For now, it seems certain Boric will establish , though its prominence in the sector remains to be seen. The strategy will also address the impact of lithium production on local communities and the environment. Government officials have suggested that going forward, Chile will only approve projects that use a new technology, Direct Lithium Extraction (DLE), designed to extract lithium without relying upon the traditional evaporation process. The hope is that DLE technology would reduce water use in the Atacama, one of the most arid areas of the world.

The global scramble for lithium, including by the United States, China and Europe, will promote continued experimentation in this strategic industry, including in Chile.鈥�

DLE technology is untested at a large scale. But the global scramble for lithium, including by the United States, China and Europe, will promote continued experimentation in this strategic industry, including in Chile. In the United States, for example, last year鈥檚 Inflation Reduction Act promises billions of dollars in incentives to promote the production and adoption of electric vehicles and strengthen the supply chain for renewable energy technologies. That could be a boon for Chile, as the legislation encourages U.S. manufacturers to purchase critical minerals, including lithium, from U.S. mines or from countries like Chile that have free trade agreements with the United States. For the same reason, the European Union recently renegotiated its trade agreement with Chile to facilitate European access to Chile鈥檚 lithium. For electric vehicle makers in both the United States and Europe, Chile鈥檚 high environmental standards are part of the country鈥檚 appeal.

For that reason, Chile鈥檚 lithium strategy is highly anticipated. As much of the world transitions to renewable energy and electric vehicles, all eyes are on Chile as it sets out to calibrate the role of the government and private companies, and the best way to safeguard the environment and local communities.