At the end of April 2023, Chile’s leftist President Gabriel Boric announced the nationalization of its lithium reserves. Boric’s speech justifying his actions highlighted the economic and social reasons often behind nationalization and contained considerable appeals to environmental consciousness. Chile’s nationalization of lithium foretells a forthcoming international wave of greenwashed protectionist policies revolving around Rare Earth Elements (REEs).
Chile is one side of the “Lithium Triangle”, the other two being neighboring Argentina and Bolivia, which have most of the world’s proven lithium reserves. Chile has the world’s third-largest reserves behind its neighbors, but its extraction efforts have allowed Chile to outproduce everyone globally. It dwarfs the second-largest lithium producer, Australia, by almost 100% and possesses a wealth of expertise and equipment to sustain production. The US imports approximately 91% of its lithium from the Lithium Triangle, mainly from Chile. Chilean Lithium producer Sociedad Química y Minera de Chile (SQM) is a leading supplier of lithium to the US. Earlier this year TeslaTSLA -1% executives met with Chilean authorities as well as SQM and Albemarle executives to increase business cooperation as the EV maker plans to secure larger supplies of lithium