Chile Nears Decision on Salt Flats Allocation in New Lithium Strategy

Chile's government is making significant progress in determining which salt flats will be designated for protection and which will be made available for lithium exploration as part of its new national lithium strategy, according to Economy Minister Nicolas Grau. Under the strategy, authorities plan to restrict lithium activities on 30% of the surface area of salt flats in the country's northern desert, while over 10 salt flats will remain open for development through new contracts.

Minister Grau expressed confidence in the issuance of at least one new contract within the next 12 months, with the government aiming to have five new projects in operation by 2025. The surge in interest from investors and companies worldwide in Chile's lithium reserves, the largest globally and a vital component in electric vehicle batteries, has led to heightened negotiations and discussions.

To meet the growing demand for lithium, Chilean authorities are actively identifying new extraction areas and formulating contract bidding regulations, following a public-private model. A recent roadshow in Germany and France was part of these efforts, with another planned for Korea, Japan, and China.

Chile's lithium production has traditionally been limited to two companies operating on a single salt flat, resulting in a declining share of the global market in recent years. President Gabriel Boric's approach aims to involve the state in operations deemed strategically significant while allowing private firms to retain control of non-strategic projects. Minister Grau emphasized that the government is adopting a flexible approach to defining what constitutes "strategic" to ensure that private sector involvement remains economically viable.

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