Albemarle (NYSE:ALB) gained heavily Monday, trimming Albemarle’s losses from last week. The stock fell 10% on Friday amid reports that Chile was considering nationalizing its lithium mining industry. Albemarle CEO Kent Masters told the media on Friday that the company’s existing mine and contracts in the country would not be impacted.
Chilean President Gabriel Boric announced the partial nationalization of lithium resources. Chile has the largest lithium reserves in the world, and is second in mine production to Australia. The two main players in Chilean lithium, SQM and Albemarle, took a tumble on the news. They have very unequal exposure to this.
On Thursday evening, Boric stepped in front of a mic and announced the partial nationalization of lithium resources in Chile. The policy was just announced, is thin on details, and has to make it through the legislature and past U.S. diplomatic pressure. But if this goes through, what he is asking for is state majority ownership of current lithium mines and all future ones in Chile. Crucially, he stated that Chile will honor all current contracts.
Chile has the largest lithium reserves in the world, and is the second largest producer after Australia. They are also on the short list of US free trade partners whose lithium qualifies for the critical minerals portion of the new US EV subsidies. There is a lot riding on all this for anyone who makes anything with a battery.
Albemarle leaped $6.78, or 3.9%, to $180.53.