Mr Boric said in his announcement that Chile would not cancel existing contracts, though it would try to negotiate with mining firms to voluntarily shift to a public-private model.
But he signalled the country’s ambitions to participate in the higher margin industries surrounding battery production rather than being restricted to mining, a common lament of emerging markets with big deposits of the metal.
Speaking from the northern city of Antofagasta on Friday afternoon, Mr Boric, 37, said the government has ambitions to produce value added products and batteries.
“In Chile we can add value, we can produce batteries, here in our country, we just don’t have to extract the raw material,” Mr Boric said, adding that the government was opening a technological institute of lithium and salt flats in the northern city.
‘No material impact’
Separately, Chilean economic development CORFO said Chinese automaker BYD plans to build a $US290 million ($433 million) lithium cathode factory in Chile’s northern Antofagasta region.
SQM has a larger footprint in Chile, with 81,000 hectares for lithium extraction compared with Albemarle’s 16,000 hectares.
In a statement, SQM it was “analysing the strategy delivered by the government”.
Albemarle said it would have “no material impact on our business” and that it would continue talks on investing in further growth and using new technologies in Chile.
The economy ministry pushed back against describing the planned move as a nationalisation of the industry but acknowledged the state would have a controlling stake in every public-private venture looking to extract lithium.
“It’s not valid to talk about a process of nationalisation because the announced strategy doesn’t alter the standing of valid legal property,” the ministry said in a statement to Reuters, adding that the current law gives state ownership over lithium already.
“When it comes to the Atacama salt flats, the president clearly said in his speech that Chile will respect what’s been established in existing contracts.”
In neighbouring countries in the lithium triangle, which spans Chile, Argentina and Bolivia, governments are increasingly pushing for a greater public sector stake in mining of the metal.
Such resource nationalism, long a hallmark of Latin America’s oil sector, has a poor record, according to Benjamin Gedan, director of the Latin America program at The Wilson Centre, a Washington think tank.
He said historically, mining in Latin America has mostly failed to bring about steady growth, and caused untold environmental damage, which has frequently led governments to take over private companies.
“Today’s lithium boom offers an opportunity to learn from past mistakes,” Mr Gedan said, calling it “a difficult balancing act”.
Giving a big role to the state without excluding private investors is a “savvy middle ground”, he said.
Argentine state energy firm YPF last year began exploring lithium, while Bolivia has long maintained strict control over its huge, though largely untapped, reserves. It recently gave out a lithium tender to a Chinese consortium including battery giant, CATL.
Mexico’s President Andres Manuel Lopez Obrador and Bolivia’s Luis Arce have touted the idea of a regional lithium “OPEC” to co-ordinate on lithium policy and benefit local economies.
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