An Update On The New Lithium Strategy: Unlocking New Opportunities For Private Companies

• Published date: 20 June 2023
• Subject Matter: Corporate/Commercial Law, Environment, Energy and Natural Resources, Corporate and Company Law, Contracts and Commercial Law, Environmental Law, Mining
• Law Firm: Urzua Abogados
• Author: Mr Daniel Weinstein

Introduction

The Government of Chile recently released an updated version of the National Lithium Strategy ("NLE"), which is poised to reshape the country's lithium industry. The NLE was first announced just two months ago (an article about the key ideas of the original announcement can be found here). This article provides a summary of the key points covered in the updated NLE and highlights the opportunities it presents for private companies operating in the lithium sector.

Executive Summary

The updated NLE emphasizes the crucial role of private companies throughout the lithium value chain and clarifies that the state will only exert control in select cases of public-private partnerships. It also outlines the tender process for special lithium operation contracts and their starting date, and underscores the aim of promoting technological advancements and value addition in the lithium industry.

Key Ideas and Novelties in the Updated NLE

1. Public-Private Partnership: The updated NLE emphasizes that the private sector will be a strategic partner in the development of the lithium industry. Contrary to earlier reports of nationalization by some media outlets, the NLE does not imply the takeover of lithium companies. Private companies' involvement is recognized and emphasized throughout the document.
2. Scope of Public-Private Partnership: Private companies will play a significant role in sustainable exploration exploitation, and value addition projects. The NLE promotes technology development across the entire lithium value chain.
3. Structures of Public-Private Partnerships for Salt Flat Exploration and Exploitation: The NLE will allow for diverse mechanisms to select private partners based on the specific characteristics of each salt flat, the type of activity (exploration or exploitation), and the presence of existing incumbents. Joint ventures will be the primary form of association between the state and private companies.
4. Diversification of Actors: The NLE stresses the importance of diversifying actors within the lithium industry to stimulate a more competitive market. With 63 saline environments identified, each with unique characteristics, tailored knowledge and productive developments are essential for effective lithium exploitation. This is a hint that the government will welcome companies of all sizes and capabilities that offer disruptive processes, methods, and technologies.
5. Control by Private Companies in Non-Strategic Salt Flats: The updated NLE...