Exclusive-Chile to start lithium negotiations with SQM this semester

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SANTIAGO (Reuters) – Chile’s government will start talks with lithium giant SQM over its operations in the Atacama “this semester” to convince the firm to sign onto a state-led public-private model, the economy minister told Reuters on Monday, and aims to wrap up dialogue over boosting state control over lithium during the current government.

   In his first interview with international media since the government announced plans for state control of the metal key for electric vehicle batteries, Economy Minister Nicolas Grau said state miner Codelco would start talks over public-private lithium production “as soon as possible.”

“Codelco’s conversations with the companies that operate in the Salar de Atacama, particularly with SQM, which ends its contract in 2030, is something that will begin immediately during this semester,” Grau said, adding that progress is also expected with Albemarle (NYSE:ALB).

SQM and Albemarle are the only two lithium producers in Chile and operate in the Atacama salt flat, which has 90% of the country’s lithium reserves. Stocks for both companies plummeted on Friday following President Gabriel Boric’s announcement that the state planned to boost control over the country’s lithium industry.

“Regarding the conversations related to the Salar de Atacama, I want to be very clear on this, it is something that is going to be defined during this government,” Grau said, adding that there are no concrete deadlines, but all actors are aware of the urgency involved. The next national election is scheduled for 2025.

The strategy includes a new national lithium company, which congress must approve, but Grau said the government believes Codelco has the “capacity to assume new challenges” as well as the “scale and know-how” to deal with lithium.