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(Kitco News) - After Chile's President Gabriel Boric announced a nationalization plan for his country's lithium sector, miners are still striving to understand what the ruling means, noted Fastmarkets William Adams.
On Friday Adams recorded Kitco Roundtable with mining audiences manager Michael McCrae and correspondent Paul Harris. Adams is head of battery metals research at Fastmarkets.
Last week lithium miners dropped on news that Chile plans to nationalize its lithium sector, the world's second largest producer of the metal essential in electric vehicle batteries. The government said that nationalization would boost the country's economy and protect its environment.
After the news lithium giant Sociedad Quimica y Minera de Chile (SQM) dropped 18% to $63.44 a share. Albemarle slid 10% to $173.75.
The lithium space had already been hit by falling lithium prices, which Benchmark Mineral Intelligence says is down by half since the start of the year.
Adams said that there is not much clarity about the government's plans. Current contracts are supposed to be exempt from the government's new initiative.
"All these negotiations are going to take a long time," said Adams. "That creates a lot of doubt. It's going to take a long time before we get clarity. In the meantime, I think the danger is that it threatens further investment."
