South Korean battery companies are reportedly exploring the possibility of establishing a lithium processing plant in Chile, the world’s largest holder of lithium reserves. According to Bloomberg on Jan. 19 (local time), Invest Chile, the foreign investment promotion agency of the South American nation, has held meetings with several South Korean companies regarding this matter.
Carla Flores, executive director of Invest Chile, stated, “Two companies are interested in converting Chile’s lithium for use in batteries, and there is a possibility that the Korean project could export lithium cathode materials to the United States.” The South Korean companies that have shown interest in Chilean lithium include POSCO Holdings, SK on, and LG Chem. POSCO Holdings and LG Chem have disclosed that they are considering various investments and options in Chile and other regions, while SK on is reportedly keeping a close eye on Chile.
Lithium, dubbed ‘white petroleum,’ is a key raw material in almost all types of batteries. Its value has surged recently with the rising popularity of electric vehicles. Bloomberg’s lithium price index shows a nearly sixfold increase from 177.93 in March 2021 to 1026.84 in March of the following year.
Meanwhile, the Chilean government declared the nationalization of lithium in April last year. Chile is the world’s largest holder and the second-largest producer of lithium. President Boric, who took office in March 2022, had promised during his presidential campaign to establish state-owned companies for lithium production and to prohibit the privatization of strategic assets.
However, the countries of the Lithium Triangle (Chile, Bolivia, and Argentina), which hold 53% of the world’s lithium reserves, have recently been increasing their control over lithium. Bolivia nationalized lithium in 2008, and Argentina designated lithium as a strategic mineral this January, halting mining rights for companies. Mexico, holding about 2% of the world’s lithium reserves, also enacted a law nationalizing lithium.