Janet Yellen Visits Lithium Project in Chile

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By LatAm Reports Editorial Team

U.S. Treasury Secretary Janet Yellen recently visited Chile to strengthen the U.S.-Chilean ties and diversify the U.S. supply chains. During her visit, Yellen toured the Albemarle lithium mine in northern Chile, the world’s second-largest producer of lithium and the largest lithium reserves. Yellen emphasized that the increased cooperation between the two countries would benefit both countries, improve energy security, and help achieve key climate goals.

Chile is a crucial trading partner for the U.S. as it is the world’s largest producer of copper and the second-largest producer of lithium, both essential components needed in batteries for electric vehicles and other technologies as part of the green transition. Yellen highlighted that expanding trade flows with Chile would create economic opportunities in both countries and bring them closer to achieving their climate goals.

The U.S. is keen to reduce its dependence on China for critical minerals and other goods and bolster ties with key allies and partners such as Chile. Yellen emphasized that the rising demand for clean energy could generate some $3 trillion in global investment opportunities through 2050.

Chile’s free trade agreement with the United States means that critical minerals from Chile help vehicles qualify for clean vehicle tax credits under the Inflation Reduction Act. Albemarle’s investment in Chile is a testament to the benefits of expanded ties between the two countries. Albemarle has two sites in Chile that employ 1,000 people, a production site in Salar de Atacama, and a conversion plant in La Negra.

Yellen also praised Chile’s ambitious climate agenda, including its green grid, with 60% of its power coming from zero-carbon sources, and its issuance of the world’s first sovereign sustainability-linked bond. Chile aims to reach 100% in EV sales by 2035 and could well lead the way in green hydrogen, with more than 40 green hydrogen projects underway.

Chile’s lead production role in copper is critical, as demand is projected to double by 2035, because the metal is required for everything from electric vehicles to offshore wind turbines and transmission networks. With 30% of the global market share and the largest lithium reserves, Chile is also expected to see a tripling of demand by 2030 given its key role in energy storage, such as for EV batteries.

In the medium- to long-term, the U.S. plans to ramp up lithium production in the United States, citing a planned Albemarle lithium mine due to open in North Carolina by 2030 and a separate mine and processing facility in Nevada that broke ground one year ago. The U.S. is also exploring the possibility of a national lithium strategy and regulatory framework to support domestic production of strategic goods.

Overall, Yellen’s visit to Chile underscores the Biden administration’s commitment to the green transition and the importance of international cooperation in achieving global climate goals.