Chile: National Strategy for Lithium

In brief

Yesterday evening (Thursday 20 April 2023), President Boric –via national transmission– announced the new National Strategy for Lithium ("Strategy"). The main points of this new Strategy are detailed below.


Contents

In more detail

  • The State will have a prominent role on the lithium Strategy. This entails the inception of a 100% stated-owned National Lithium Company ("Empresa Nacional del Litio"). This entity will be –among other tasks– in charge of conducting and organizing the public-private cooperation for the exploitation of the salt flats (or "Salares", e.g., "Salar de Atacama").
  • The Strategy will be set in motion on this year's second semester (June 2023, onwards).
  • While Congress will be discussing the statutory issues surrounding the National Lithium Company, the government will seek –by means of other state owned companies such as Codelco and Enami– to immediately engage with private parties in order to organize and promote the extraction of brine. The details of such engagement are yet to be defined.
  • There are 45 major salt flats in Chile. Of such total amount, 42 of them are currently in conditions to be exploited and 15 of these, in some phase of operational degree. For example in the Maricunga salt flat where Codelco has a Special Operation Agreement ("Contrato Especial de Operación", CEOL). In the same strategic site, companies such as Salar Blanco and Simbalik currently have incipient extraction operations.
  • Moreover, there are other players such as SQM (with an agreement with the State until 2030) and Albermarle (with an agreement, until 2043). These companies already have considerable lithium production. The Strategy contemplates to maintain and uphold their rights. However, it also contemplates to begin –via Codelco– conversations with these companies, in order to begin drawing a new contractual relationship, per the implementation of the Strategy.
  • The National Lithium Company, also encompasses the creation of the Public Institute of Lithium and New Technologies, for the advancement in policies such as I+D generation.
  • Ultimately, there is still some time until the administration takes a more definitive and broke down stance on the (present and future) relationship with private entities and/or investors. The Bill to be sent to Congress concerning the National Lithium Company, or the clarifications granted in the press and/or by means of joint ventures towards private parties, with Codelco and Enami, will shed some light on these matters.

Click here to access the Spanish version.


Copyright © 2023 Baker McKenzie. All rights reserved. Ownership: This site (Site) including all documentation and content (Content) is a Copyright © 2022 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.