We invite you to read the opinion column on the challenges regarding public policies in the context of the National Lithium Strategy, written by our Director of Energy and Natural Resources, Alejandro Montt.
A few days ago in this medium, academic Gustavo Lagos warned that, between 2035 and 2040, the Treasury would lose close to US$ 2 billion in taxes for delaying the entry into operation of lithium projects necessary to reach a production of 1 million tons. He added that it would be possible to achieve such production by improving the competitiveness of investments and attributed the potential delay to the indigenous consultation process, possible disputes with mining concessionaires located in the salt flats, and to the legal regime of lithium.
Without entering into the analysis of the causes of the delays, which we share, a prior question must be asked: can we, in our current circumstances, reach one million tons by 2035? Industry figures indicate that developing new projects to reach one million total tons by 2030 would mean collecting, through taxes and royalties alone, some nominal US$21 billion from 2026 to 2035, an amount equivalent to more than two CAE or 3.1 years of PGU in regime.
“The National Lithium Strategy is insufficient. The desire to control productive decisions can mean a mess of historic proportions.”
JP Morgan, as also reported by DF, said that Chile, with a production of 215 thousand tons of LCE, has already moved into third place among world lithium producers, below Australia and China. Today we have possible increases in production in the Salar de Atacama in the projects of SQM (and its imminent alliance with Codelco) and Albemarle, in addition to new initiatives from Codelco in Maricunga and from Enami in the Alto Andinos salt flats. According to Cochilco, Chilean production would reach 336,000 tons of LCE in 2035, due to the expansions of SQM and Albemarle.
Is it possible, then, to reach one million tons by 2035? Certain Government authorities have expressed that they would be satisfied if, during this mandate, the development of “a couple” of additional projects begins. It is clear that it would be a completely insufficient goal, considering the potential, the challenge and the results to which we should aspire. And not to mention reaching one million tons. The above, added to the fact that for the fifth consecutive year Chile fell in the ranking of mining investments, should raise the concern of these authorities and encourage them to look for other paths.
Our competitors will increase their production much more strongly. In Argentina, where it is estimated that US$25 billion of investment will materialize in the short term, it is expected to surpass Chile in 2028 and produce at least 450,000 tons of LCE by 2030. This country has at least 30 projects at different levels of progress.
The National Lithium Strategy, although well-intentioned, seems completely insufficient. The desire to control productive decisions can mean a farce of historic proportions, considering the enormous public policy challenges we face. Isn’t it time to think about the concessionality or a clear program for granting special operating contracts, rather than calls to express interest without real investment consequences? If we don’t change course quickly, it will be too late to regret it.
