Will Chilean Lithium Qualify for Incentives Under the Inflation Reduction Act?

by | 22. Feb 2024 - 08:47 | Politics

Yellen to visit Chile next weekThe Latin American country has the world’s largest lithium reserves.

To boost ties on critical minerals, U.S. Treasury Secretary Janet Yellen will visit Chile next week, Bloomberg reports, citing the Treasury Department. The Latin American country is home to the world’s largest reserves of the battery mineral lithium, data from the U.S. Geological Survey show (PDF). However, the country’s output is dwarfed by the industry leader Australia, which produces almost twice as much. To attract foreign capital and boost its mining sector, the Chilean Government pushes for more international partnerships. The existing trade agreement with the U.S. would also qualify Chilean lithium for tax incentives under the Inflation Reduction Act, Bloomberg adds. Chilean and U.S. officials have already discussed the possibility in November. This could make the Latin American mining sector a potential investment target for U.S. carmakers searching for critical minerals to use in electric vehicle batteries. In addition to lithium, Chile is the biggest producer of copper (PDF), needed for wires and electrical circuits, and the mining company Aclara Resources is developing a rare earth element deposit near the major city of Concepción.

Photo: jroballo

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