The EU has signed a raw materials agreement with Chile. Although the word “lithium” does not appear in the accompanying EU communication, from a European perspective, the deal is likely to be primarily about securing lithium reserves.
According to the official wording, both sides want to “deepen cooperation in the field of sustainable raw materials value chains that are necessary for the clean energy and digital transition of both partners.” It also aims to build an industry for extracting and processing raw materials. The agreement was signed by EU Commissioner for Internal Market Thierry Breton and Chile’s Foreign Minister Alberto van Klaveren Stork.
The new partnership focuses specifically on five areas: the integration of sustainable raw material value chains (including through joint projects, new business models, promotion and facilitation of trade and investment relations); the cooperation on research and innovation, for example, to improve knowledge of mineral resources and minimise environmental and climate footprints; strengthening environmental, social and governance (ESG) criteria; building infrastructure for project development; and the implementation of international labour standards.
As a next step, the EU and Chile will develop an “operational roadmap” to coordinate cooperation between “relevant stakeholders from EU Member States and Chile.” These partnerships will be supported by the EU’s Global Gateway Investment Agenda for Latin America and the Caribbean.
Commenting on the new agreement, President of the Commission, Ursula von der Leyen, said: “It is a great pleasure for me to witness the signing of this partnership for the development of sustainable raw materials value chains between the EU and Chile. The Global Gateway will be one of the main drivers of our evolving partnership. We are like-minded, we share the same values, and we are partners of choice to become key global players in the clean energy and digital transition.”
With the agreement, the EU will likely secure access to Chile’s lithium reserves. The world’s largest lithium reserves and an important part of current production are in Chile’s Salar de Atacama salt lake. In addition, there are other salt lakes in the tri-border area between Argentina, Bolivia and Chile, which, together with Salar de Atacama, hold about half of the world’s lithium deposits.
The EU is diversifying its dependence on resource-rich countries and making its resources accessible. To this end, the EU Commission published a draft of the “Critical Raw Materials Act” in March. It proposes that by 2030, ten per cent of the EU’s demand for critical raw materials should be covered by its own mining, 40 per cent by local processing and 15 per cent by EU recycling capacities.
However, imports will continue to play a major role. The Commission, on behalf of the EU, therefore also signed strategic raw material partnerships with Canada (June 2021), Ukraine (July 2021), Kazakhstan, Namibia (November 2022) and Argentina (June 2023).
Keyword: EU reaches raw materials deal with Chile