Chile: Gabriel Boric rejects a million-dollar tender to exploit lithium |  The president-elect spoke of "bad news" and announced that he will review the decision

The Chilean government announced a millionaire award to two companies for the extraction of lithium, prompting a quick reaction from the president-elect, Gabriel Boric, who anticipated that will “review” the decision. The Mining Ministry confirmed that the Chinese auto giant ByD and the national company Servicios y Operaciones Mineras del Norte obtained contracts for the extraction of light mineral for 61 and 60 million dollars, respectively, for 20 years. The tender had already generated controversy in Chile for having carried out just two months after the end of the term of Sebastián Piñera and despite the requests of Boric and the parliamentary opposition of paralyze and analyze the award, which had until Friday, January 14 to be announced.

“Bad news from the last minute”

After meeting with regional governors in Santiago, Boric called the announcement of the Ministry of Mining “bad news”, and took for granted that their teams will review the tender. “This was an exclusive attribution of the government in office and it seems to us that it is bad news. It reminds me of those lashing laws that were made at the last minute“said the future head of state.

“It seems to have become customary in Chile that, when there is an alternation of political coalitions in power, the outgoing government takes advantage of its last weeks after the election to carry out various modifications that compromise not only the incoming government, but also the State of Chile,” he said. Boric this Thursday at the National Business Meeting (Enade).

Boric insisted that he will review the tender in detail with his work team and regretted that the Executive made progress, although his force had asked that they “not innovate in the matter and, therefore, allow have a long-term debate on a commodity as strategic as lithium“. The former student leader said that we must let the institutions work and stated:” We are going to evaluate it with all the tools that we have at our disposal from March 11, which is when we are going to start exercising our powers. ”

Instead of these tenders, Boric proposed in his government program to create a national lithium company and turn the mineral into a strategic resource for Chile. The objective is to repeat a process similar to that of copper, when the state-owned Codelco was created in the 1970s, which handles around a third of the red metal in the country.

During his presentation to businessmen at Enade, Boric acknowledged that Chile is going through a difficult economic time, since the “finances are stressed”. Faced with this situation, he added that “there can be no redistribution of resources if this does not come hand in hand with sustainable economic growth,” so all policies adopted in the economic area they must be focused on environmental sustainability.

Parliamentary requests and criticism

Boric’s advisers and team members had met privately last week with the Minister of Mining, Juan Carlos Jobet, so that he did not advance in the negotiations and leave this lithium tender deserted, something that finally did not happen. The Mining portfolio alleges that Boric’s team’s orders were met and for that, for example, the operating quotas that were offered were lowered from five to two and part of the resources will be delivered to local communities and research.

The government’s decision also had its rebound in the Chamber of Deputies, which on Tuesday had declared admissible the projects that seek to stop the sale of part of the reserves. The initiative aimed at the current government not completing the sale of part of the metal reserve to foreign entities, the Bio Bio portal reported.

But on Wednesday the opposition withdrew from the special session in which the process was to be analyzed with the presence of Minister Jobet. “It is a lack of respect and a denial of a State power that the government, one hour before the special session in which we are called to debate this matter and make relevant agreements for the country, has awarded two private companies the exploitation of lithium for 30 years, “explained deputy Raúl Soto, from the Party for Democracy.

When leaving the room, the legislator said that they will try “by all means” to stop this process. “The Piñera government did not hear any call from the entire national community, organized citizens, academics, the political world, even businessmen who are for sustainable development. Today slam the door“, lamented the green deputy Esteban Velasquez.

For her part, the Christian Democrat senator and former presidential candidate, Yasna Provoste, denounced: “They did not listen to the president-elect or his team, they did not listen to the Senate or the Chamber, least of all the communities. Simply the lithium business could do more.”

An industry in decline

Last Saturday, the president Pinera He ratified his position on the negotiations around the lithium industry. “We were the first country in the world to produce it and today we are not. We decided to launch a plan to use lithium, which is the essential mineral for the world to come, “said the Chilean president at a press conference and added: “Either we leave it underground or we use it for the benefit of the Chileans”.

According to government data, the country has about 40 percent of the world’s reserves, partly located in territories where indigenous populations reside. Despite having the world’s largest lithium reserve, located in the Salar de Atacama, in the driest desert in the world, Chile has been losing market share in recent years and was ousted in 2017 as the world’s leading producer by Australia, which now holds 46 percent of the total.

Countries like China and Argentina have increased their competitiveness and follow Chile with a ten percent and nine percent share, respectively, according to official figures. The government seeks to produce 400 thousand tons of marketable metallic lithium to stop this drop in participation.

The opposition filed an appeal to stop the lithium tender in Chile

Seven deputies of the Chilean opposition presented this Thursday an appeal to the Comptroller’s Office to paralyze and declare unconstitutional the lithium tender awarded on the end of the government of Sebastián Piñera, to a company with Chinese capital and a local one, for 121 million dollars.

“We are not going to allow the government to give away this strategic product”, raised the socialist deputy Leonardo Soto, after submitting the petition to the autonomous entity. “Constitutional norms and legal norms have been flagrantly breached in the sight and patience of everyone,” added Soto.

According to the brief presented to the Comptroller, the process violates the Constitution by not knowing the exact place of exploitation of this light metal, key to the manufacture of batteries for cars and electronic items.

Another of the illegalities that arises in the letter is that During the bidding process, the Chilean Nuclear Energy Commission was not consulted, as lithium is considered in Chile as an element of strategic exploitation as are natural atomic materials.

Leave a Reply