Chile's President Gabriel Boric said on Thursday he would nationalize the country's lithium industry, the world's second largest producer of the metal essential in electric vehicle batteries, to boost its economy and protect its environment, Trend reports citing Reuters.
The shock move in the country with the world's largest lithium reserves would in time transfer control of Chile's vast lithium operations from industry giants SQM and Albemarle (ALB.N) to a separate state-owned company.
It poses a fresh challenge to electric vehicle (EV) manufacturers scrambling to secure battery materials, as more countries look to protect their natural resources. Mexico nationalized its lithium deposits last year, and Indonesia banned exports of nickel ore, a key battery material, in 2020.
"This is the best chance we have at transitioning to a sustainable and developed economy. We can't afford to waste it," Boric said in an address televised nationwide.
Future lithium contracts would only be issued as public-private partnerships with state control, he said.
The government would not terminate current contracts, but hoped companies would be open to state participation before they expire, he said, without naming Albemarle and SQM, the world's No.1 and No.2 lithium producers respectively.