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Chilean key actors reject idea of nationalizing lithium

Bnamericas
Chilean key actors reject idea of nationalizing lithium

Chile's mining minister Baldo Prokurica came out on Tuesday against a bill to declare of national interest private companies that exploit lithium. The bill, approved on October 17 by the mining committee of the lower house, leaves the door open to possible expropriation of lithium producers such as SQM and Albemarle.

Prokurica told local newspaper Pulso that this was a bad sign for investors. "I think that the expropriation route is the way of Venezuela, Bolivia, and has a bad result. As a government we are promoting Chile so that companies invest in the country."

Lawmakers aim to discuss the bill in the lower house during the week. It needs simple majority to be approved.

To push the bill, lawmakers cited payment problems of SQM and the disagreements over the preferential lithium sale price with Albemarle as evidence that companies don't meet the lease contracts.

Lithium in Chile is considered to be property of the state through state development agency Corfo. It is a non-concessional substance, and Corfo has lease contracts with private companies to allow them to mine and process the mineral.

The president of the mining commission Marcela Hernando told local newspaper El Mercurio Antofagasta when the bill was approved: "Today, the constitution says that lithium is a non-concessional substance, but through these Corfo leases or contracts, in practice they turn into concessions but without the tools to control a concession."

Like Prokurica, the president of trade association Consejo Minero, Joaquín Villarino, also rejected the bill.

"I think there are parliamentarians that do not realize the serious damage they are provoking to the image of the country, and to investment decisions, with these kinds of bills. For investors that take serious the legislative work of the country, this is a very bad sign," Pulso cited Villarino as saying.

Villarino highlighted that Chilean mining success and sustained foreign investment comes as result of respect for institutionality and strict rules.

LONDON MARKET

On his visit to London Metal Exchange (LME) week Prokurica promoted Chile as the go-to country to invest in lithium value-added products.

"We are looking for partners to get to final products and join the value chain. I think it's possible, we have been trying to make contact with Tesla, and as a government we are promoting the use of electric vehicles," Prokurica told Pulso.

On the occasion, the minister requested an evaluation of lithium being traded on the LME, just as copper and other metals.

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