Chile: Chilean President Gabriel Boric has appointed state-owned Codelco, the world's biggest Copper producer, to spearhead the development of Lithium required for electric vehicle batteries. This move is aimed at expanding the long-stalled Lithium industry of the country, which is already the second-largest producer of the metal globally, following Australia. With the rising demand for electric vehicles to reduce greenhouse gas emissions, the country is sitting on the largest known Lithium deposits in the world. In April, Boric handed over the responsibility of negotiating with new companies and current Lithium miners Albemarle and SQM to Codelco.

Codelco, the Copper company, aims to encourage other companies to join a voluntary state-run partnership before their current contracts expire. The goal is to boost the output of Copper, which has fallen to its lowest level in 25 years. However, as Codelco has no prior experience in Lithium mining, it remains to be seen if they can tackle both challenges simultaneously. Therefore, the company is planning to prioritize its resources on Copper production and delegate Lithium operations to other miners while negotiating contracts.

Codelco, a state-owned firm in Chile, may adopt a strategy where it contributes only capital for future Lithium projects. This could result in the firm holding a majority stake while leaving operations to private partners. A former senior executive of Codelco noted that this approach could resemble the model used by Indonesia with Freeport-McMoRan, where the state gained majority control, but the firm remained as operator. The demand for Lithium, which is extracted from brine ponds located in Chile's high-altitude salt flats, is high among global car manufacturers such as Tesla and BMW. Additionally, governments worldwide, including Berlin and Beijing, require Lithium to fuel their transition towards renewable energy.

According to Codelco Chairman Maximo Pacheco, the Lithium units were being operated by compact teams and there are no plans for major hiring as talks with SQM and Albemarle progress. The company has established two Lithium subsidiaries, Salares de Chile and Minera Tarar, but will wait to see how negotiations go before considering any recruitment drives. While Codelco has started talks with SQM, whose existing Lithium contract expires in 2030, Albemarle has stated that it will only begin negotiations closer to its contract's expiration date in 2043. Despite claims that the Lithium plans would not impact Copper, experts outside of the company remain skeptical. Building up Codelco's Lithium expertise from almost zero is likely to require significant resources.

Codelco faces the challenge of boosting production of Copper, which has hit a 25-year low. Adding to their woes is the abrupt resignation of CEO Andre Sougarret, who cited "complexities" within the company as the reason for his departure. Codelco must now focus on reviving production while also managing internal issues.