Does Chile’s lithium plan fall short of “nationalisation”?

Blair Hannon

Global X ETFs Australia

On April 20, Chile’s President Gabriel Boric said he would move forward with plans to nationalise the country’s lithium industry.1 On the surface, Boric’s announcement would seem to represent a major escalation in government oversight that could compromise the prospects of operators in the region and affect the global lithium industry. Chile was second only to Australia in terms of lithium production in 2022 and boasts the world’s third largest lithium reserves at 9.6 million tons.2 In Global X’s view, however, Boric’s proposals fall well short of traditional nationalisation and do not represent an imminent risk to lithium miners in the region.

Key Takeaways

  • President Boric campaigned on lithium nationalisation, but the implementation of this framework should not lead to full state control of lithium assets, especially in the short term.

  • We believe operations will continue more or less unhindered for the major miners in the region, namely SQM and Albemarle.

  • New regulations complicate the outlook for new Chilean lithium contracts in the coming decades, although they could also encourage the state to bring more output to the global marketplace.

Boric’s Plan Does Not Call for Immediate Control of Lithium Companies

Global X expects the initiative to pass Chilean Congress in the second half of 2023, but revisions are probable. Boric’s left-wing Social Convergence party does not hold a majority in Congress, which has already presented obstacles to the president’s agenda. There is also uncertainty regarding the long-term implementation of the policy. The balance in the Chilean government could shift dramatically over the next several years, especially with the next general election looming in 2025. It remains to be seen if an opposition party would be interested in maintaining the same lithium strategy.

Boric’s plan calls for the formation of a “National Lithium Company” to control Chile’s lithium operations and would require new lithium contracts to be issued through a public-private partnership. The most significant revelation from the president’s address is that the state would need to own at least 51% of any new lithium contract through these public-private joint venture structures.3

Notably, contracts for SQM and Albemarle, the primary miners of Chilean lithium and two of the largest lithium miners in the world, are expected to be honoured.4 SQM has a contract until 2030 and Albemarle’s runs through 2043.5 Barring a dramatic shift in Boric’s position, these companies should be able to continue to operate for the duration of their contracts without government ownership. Boric expressed a desire to negotiate with these miners to incorporate some degree of state ownership into existing contracts; however, it is likely that a mutual agreement would be required to do so.

Miners Have Time to Adjust to New Regulations

SQM and Albemarle are the most likely companies to undergo future operational changes due to these policy developments. However, because of the duration of current contracts and unique points of leverage, we believe these miners are both fairly insulated from associated risks.

SQM is domiciled in Chile, and the company’s primary lithium producing project is the Atacama salt flat. We believe the duration of SQM’s contract does give the miner time to hash out an agreement with government officials, however. Another key consideration is that Chinese lithium miner Tianqi holds a roughly 22% share of SQM.6 Chile is a major trading partner with China, especially on lithium resources, which means negotiations between SQM and Chile are likely to include Chinese representatives seeking a balanced outcome. Ultimately, we expect SQM cashflows to be relatively unaffected in the short term and favourable conditions to be offered on renewal of contracts after 2030. In a statement following Boric’s address, SQM said that it was analysing the strategy delivered by the government and hoped the new regulations would “be able to boost lithium production expansion in Chile.”7

Albemarle also operates a project at the Atacama salt flat. The company’s La Negra operation, which is primarily supplied by output from the Atacama salt flat, accounts for 22–40% of the company’s lithium conversion capacity.8 Because 20 years remain before contract expiration, we believe the impacts before 2043 are likely minimal. Albemarle asserted that Chile’s new lithium contract model would have “no material impact” on business and that the company was assured current contracts will be honored.9

New Policy Could Bring Benefits, But Many Questions Remain

In one sense, mandated government ownership is likely to render prospective projects in Chile less attractive to miners and could act as a barrier for industry growth. Extensive government regulation is a major reason why Argentina is forecast to overtake Chile’s lithium production by 2030.10 That said, reimagined state involvement could promote expanded capacity. Historically, when companies obtain contracts in Chile, the state’s lithium regulatory body assigns them quotas intended to mitigate environmental degradation. In our view, a scenario exists where increased government ownership of lithium assets could entice officials to boost capacity.

There is much we do not know about how Boric’s plan is meant to unfold. For instance, it is not yet certain if Chile will compensate lithium miners for investments made in state-acquired lithium assets. Similarly, governance of the mandated joint ventures has not been fleshed out. Could the Chilean state choose to change which miner operates in the partnership? How would an acquisition price be set for stakes in a joint venture? Could a shift in SQM or Albemarle’s control affect the ownership structure?

We also must distinguish between the different layers of the lithium value chain. The new regulations seemingly target the extraction of raw lithium concentrates and not the conversion process that turns this input into a battery grade resource. This focus could allow a miner that is involved in a joint venture to sell lithium to itself downstream for refining. We think this scenario could lead to favourable terms of exchange, but it is too soon to assess whether regulation will be crafted to address such dynamics.

Lithium “Nationalisation” in Chile is Sensationalised

Market access to Chile’s lithium is important for the growth of the battery and electric vehicle space, and recent developments do complicate the path forward. However, the idea that Chile is outright nationalising the lithium industry distorts the likely outcome of these regulations, in Global X’s view. For now, industry participants, including SQM and Albemarle, appear well positioned to digest President Boric's plans without significant operational ramifications.

Beyond Ordinary ETFs

For more than a decade, our mission has been empowering investors with unexplored and intelligent solutions

To learn more about what Global X ETFs can do for your portfolio please visit our website.



  2. U.S. Department of the Interior, U.S. Geological Survey. (2023, January). Mineral Commodity Summaries 2023.

  3. Bloomberg. (2023, April 20). Chile Unveils Public-Private Model to Share Vast Lithium Riches with Mining Industry.

  4. Visual Capitalist. (2022, October 14). The World’s Top 10 Lithium Mining Companies

  5. Bloomberg. (2023, April 20). Chile Unveils Public-Private Model to Share Vast Lithium Riches with Mining Industry.

  6. SQM. (2023, March). Corporate Presentation.

  7. SQM. (2023, April 21). SQM Comments on National Lithium Strategy Announcement.

  8. S&P Global: Commodity Insights. (2022, August 04). Albemarle Eyes 200,000 mt Global Lithium Capacity by Year-End.

  9. Reuters. (2023, April 21). Chile Bid to Boost State Control Over Lithium Spooks Investors.

  10. Benchmark Mineral Intelligence. (2023, April 21). Chile Plans to Take Control of Lithium Mining via Public-Private Partnership

This document is issued by Global X Management (AUS) Limited (“Global X”) (Australian Financial Services Licence Number 466778, ACN 150 433 828) and Global X is solely responsible for its issue. This document may not be reproduced, distributed or published by any recipient for any purpose. Under no circumstances is this document to be used or considered as an offer to sell, or a solicitation of an offer to buy, any securities, investments or other financial instruments. Offers of interests in any retail product will only be made in, or accompanied by, a Product Disclosure Statement (PDS) which is available at In respect of each retail product, Global X has prepared a target market determination (TMD) which describes the type of customers who the relevant retail product is likely to be appropriate for. The TMD also specifies distribution conditions and restrictions that will help ensure the relevant product is likely to reach customers in the target market. Each TMD is available at The information provided in this document is general in nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information in this document, you should consider the appropriateness of the information having regard to your objectives, financial situation or needs and consider seeking independent financial, legal, tax and other relevant advice having regard to your particular circumstances. Any investment decision should only be made after obtaining and considering the relevant PDS and TMD. This document has been prepared by Global X from sources which Global X believes to be correct. However, none of Global X, the group of companies which Mirae Asset Global Investments Co., Ltd is the parent or their related entities, nor any of their respective directors, employees or agents make any representation or warranty as to, or assume any responsibility for the accuracy or completeness of, or any errors or omissions in, any information or statement of opinion contained in this document or in any accompanying, previous or subsequent material or presentation. To the maximum extent permitted by law, Global X and each of those persons disclaim all any responsibility or liability for any loss or damage which may be suffered by any person relying upon any information contained in, or any omissions from, this document. Investments in any product issued by Global X are subject to investment risk, including possible delays in repayment and loss of income and principal invested. None of Global X, the group of companies of which Mirae Asset Global Investments Co., Ltd is the parent, or their related entities, nor any respective directors, employees or agents guarantees the performance of any products issued by Global X or the repayment of capital or any particular rate of return therefrom. The value or return of an investment will fluctuate and an investor may lose some or all of their investment. All fees and costs are inclusive of GST and net of any applicable input tax credits and reduced input tax credits, and are shown without any other adjustment in relation to any tax deduction available to Global X. Past performance is not a reliable indicator of future performance. Global X Management (AUS) Limited (ACN 150 433 828) is the issuer of units in Global X Battery Tech & Lithium ETF. The financial instrument is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the index and/or Index trademark or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the financial instrument. Neither publication of the Index by Solactive AG nor the licensing of the Index or Index trademark for the purpose of use in connection with the financial instrument constitutes a recommendation by Solactive AG to invest capital in said financial instrument nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this financial instrument. Solactive AG will not be responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission. Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.

2 topics

Blair Hannon
Head of Investment Strategy
Global X ETFs Australia

Blair Hannon joined Global X ETFs as Head of Investment Strategy in March 2022. He is responsible for supporting the development of the firm’s Australian ETF business by working closely with the research, marketing, and sales team to produce...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Please sign in to comment on this wire.

trending on livewire
Get the best of Livewire by signing up to our popular daily newsletter