Aussie lithium shares jump on Chile nationalisation plan

Lithium Power International

24/04/2023 04:27

MELBOURNE, April 24 (Reuters) - ASX-listed lithium
stocks notched gains on Monday, led by Pilbara Minerals
 PLS.AX , on hopes they would benefit from higher demand for
Australian stores of the white metal, after Chile unveiled plans
to nationalise the industry there.
    Shares in Pilbara Minerals jumped 6% to hit a six-and-a-half
week high, while Liontown Resources  LTR.AX , Core Lithium
 CXO.AX  and IGO Ltd  IGO.AX  also delivered gains.
    Last Thursday, Chile's President Gabriel Boric announced a
move that would see the world's second-largest lithium producer
shift to a model in which the state holds a controlling interest
in all projects through a public company that would partner with
mining firms.    
    Australia supplies just under half of the world's lithium
and is a significant producer of copper, nickel and rare earths
- materials that are critical for the global energy transition. 
    "Chile's decision could slow down investment into the
country, which is probably slightly positive for the lithium
world, and it may force the majors to pour in more investment
dollars outside of Chile," said Glyn Lawcock, head of resources
at Sydney investment bank Barrenjoey. 
    "It probably makes Australian rock more valuable, because
you are in a much more stable regulatory environment compared to
Chile. Sure, there might be small increases in royalties
payments from time to time but we don't generally nationalise
assets."    
    Bucking the regional trend were ASX-listed miners with
projects in South America's lithium triangle which spans Chile,
Argentina and Bolivia, on concerns other governments in that
region may look to follow Chile's lead.  
    Shares in Allkem Ltd  AKE.AX , operates the Olaroz mine in
Argentina, dipped 0.5%. 
    Lithium Power International  LPI.AX , whose Maricunga brine
project is Chile's largest permitted, pre-constructed project,
welcomed the new policy which it said was widely consulted on
and would "positively transform" Chile's lithium industry. Its
shares fell 2.3%.    

 (Reporting by Harish Sridharan in Bengaluru and Melanie Burton
in Melbourne; Editing by Lincoln Feast.)
 ((Harish.Sridharan@thomsonreuters.com; Twitter: https://twitter.com/damnit_saladin;))