Shulou(Shulou.com)11/24 Report--

CTOnews.com, April 24-Chilean President Gabriel Gabriel Boric announced in a nationally televised address on Thursday night that the government would take a majority stake in the lithium industry and work with the private sector to develop this important metal resource, a plan that has unnerved the business community.

CTOnews.com query public information learned that lithium is an important raw material for the manufacture of rechargeable batteries, with the global development of renewable energy and electric vehicles, the demand for lithium is expected to increase significantly. Chile is the world's second largest lithium producer and the third largest lithium reserve in the world. However, in recent years, Chile has gradually lagged behind other countries in the development of lithium resources, so people pay great attention to Boric's lithium industry strategy.

According to Boric's plan, all companies that want to enter the Chilean lithium industry must work with the soon-to-be-established National Lithium Company (National Lithium Company), and the "state will control" each partnership. Borrick said existing contracts will be respected, but he is optimistic that they can find a way to increase state participation in these companies before the contracts expire.

Tesla CEO Elon Musk responded. Musk wrote on Twitter: "Lithium ore is very common on Earth. What is important is the refining ability." In fact, Musk is telling Chileans that their lithium mine is not that important.

Currently, there are only two companies mining lithium in Chile, one is U.S.-based Albemarle Corp., and the other is local SQM, whose concessions expire in 2043 and 2030, respectively. The shares of the two companies plummeted after Borrick announced the new deal.

Chilean business expressed dissatisfaction with Boric's plan. Ricardo Ricardo Mewes, president of the Federation of production and Trade (Confederation of Production and Trade), said they had expected "a lot of private sector involvement" in the lithium industry, but now "the state will control" the industry.

However, some analysts believe these concerns may be exaggerated. Speaking to the Economist Intelligence Unit, Saldias said the proposal "actually provides more opportunities for the private sector than the existing framework, because... there will be more capacity to participate in the project." He also warned that environmental restrictions on lithium production and more consultation with local communities could lead to "an increase in operating costs".

Mario Marcel, the finance minister, called on the business community to remain calm. He said that under the plan, private enterprises would provide capital, technical knowledge and experience, while the state would provide "financing" while safeguarding the environmental conditions of the salt lake and the relationship between "indigenous peoples" in the affected areas. It is not clear whether the government will provide funds directly in proportion to its ownership. Boric also said that the government will not only participate in the mining of lithium, but will also promote the development of lithium products with added value in an effort to become the world's leading lithium producer.

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