Chile is aiming to outline the state lithium firm model this year, the minister said

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SANTIAGO – The Chilean government, which has promised to set up a state-owned lithium firm to develop ultra-light battery metals, hopes to establish a model for the company by the end of the year, Mining Minister Marcella Hernando told local paper La Teresa on Sunday.

The South American country is the world’s second-largest lithium producer, a key component of electric vehicle batteries, and its domestic industry is currently dominated by two private companies, Albemarle Corp and SQM.

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However, the government of new leftist President Gabriel Boric, like the administrations of Mexico and Argentina, is keen to be more closely involved in the growing market for lithium, which has risen in price over the past year.

Hernando said a special team was being formed to determine the best design to run the company.

“We hope that the company will have what it looks like as an organization and that it has proposals for the business model that it will operate before the end of the year,” he said.

The minister reiterated that the government was open to the participation of private capital in the firm, although the state remains as the major shareholder.

President Boric, who took office in March, said during the election campaign that Chile should not again make the “historic mistake” of privatizing its resources, and reiterated its interest in creating companies to develop lithium.

Hernando added that as part of an ambitious tax agenda promoted by the government, lithium would not be included in plans to implement mining royalties.

“The assessment we’ve made is that it’s very complex, since lithium is an industry that’s not very mature,” he said. (Reporting by Fabian Cambro; Editing by Adam Jordan and Bill Barcrott)

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