Officials address concerns regarding Chile's new lithium strategy

Chile’s new lithium strategy, based on public-private partnerships with majority state control, has aroused interest in accelerating the development of an industry that is sustainable, with added value and environmental responsibility, the mining and economy ministers told a press conference on Thursday.

However, there are certain issues that raise concern.

One of these is the protection of the Chilean salt flats, or salars. Mining minister Marcela Hernando said that "an industry will be developed recognizing that the salt flats are fragile environments … and very complex. Each one has its particularities, in addition to their enormous importance for peoples and cultures."

Another focus of attention is the search for added value. Economy minister Nicolás Grau said there is the possibility of producing key components for batteries, such as cathodes, in Chile.

"We have had talks with private companies that make us think that in the future we could produce batteries for electric storage in Chile," said Grau.

In this line, creating a public institute for lithium and new technologies will bolster knowledge by studying the salt flats and developing new technologies for the direct extraction of lithium that allows for an increase in production without neglecting the ecosystems, he said.

José Benavente, head of state development agency Corfo, said that through joint work with the science ministry they already have the design of the institute and will consider the participation of academia as well as local and foreign private sector companies.

Another area of concern regarding the strategy is the lack of announcements about incentives for private players to enter the industry. However, Karla Flores, director of investment promotion agency InvestChile, said the policy has been well received among international investors because it provides a clear initial framework and the premise of incorporating the private sector.

"We’ve met with more than 46 international companies from 12 countries, which speaks of the interest of investors," said Flores, who stressed that Chile has more than 30 trade agreements and widespread availability of green energies for new investment projects.

Another aspect to be defined is the type of control that the State will have in each of the partnerships, whether through the planned national lithium company, state copper miner Codelco or state minerals company Enami.

While in the Salar de Atacama, the biggest salt flat and the only one currently in production, the owner of the mining property is Corfo, the plan is for the PPPs to be initially controlled by Enami and Codelco until the new company is formed. In the other salt flats exploration contracts will be awarded to private parties through transparent public processes, without prejudice to the work that the State can carry out, María Pulgar from law firm Phillippi Prietocarrizosa Ferrero DU & Uría, wrote in newspaper Diario Constitucional.

Other pending issues are defining the concept of the "strategic value" of lithium and reviewing the sectoral and environmental regulations that will govern the development of exploration and mining projects, said the lawyer.

Karla Flores, director of InvestChile, economy minister Nicolás Grau, mining minister Marcela Hernando and José Benavente from Corfo in the press conference.