On Thursday, Chilean President Gabriel Boric said he will nationalize the world's second-largest lithium business to strengthen the economy and safeguard the environment.
In the nation with the world's greatest lithium deposits, SQM (SQMA.SN) and Albemarle (ALB.N) would lose control of Chile's massive lithium operations to a state-owned firm.
As more governments defend their natural resources, electric vehicle (EV) manufacturers scramble to get battery materials.
This is our greatest hope for a sustainable and developed economy. "We can't waste it," Boric stated on national television.
He claimed state-controlled public-private partnerships will grant future lithium contracts.
He said the government would not cancel existing contracts but hoped firms would be receptive to state engagement before they expired,
SQM (Sociedad Quimica Y Minera de Chile) and Albemarle provide Tesla Inc (TSLA.O), LG Energy Solution Ltd (373220.KS),
Chile's declaration did not reverse lithium prices, which have fallen more than 70% since November owing to decreasing EV demand in China, the world's largest vehicle market.
Friday's Wuxi Stainless Steel Exchange lithium carbonate futures decreased 3.4%.