Yellen Sees Big Jump in US Imports from Chile, Points to Progress in Green Transition By Reuters

By Andrea Shalal

LA NEGRA, Chile (Reuters) – U.S. Treasury Secretary Janet Yellen predicted on Saturday that growing demand for lithium – a key component needed in batteries for electric vehicles – would substantially increase U.S. imports from Chile in coming years.

Yellen visited the US lithium producer Albemarle (NYSE:) in northern Chile on Saturday, as he concluded a visit to Chile that included meetings with President Gabriel Boric, Economy Minister Mario Marcel and business executives in Santiago.

He told reporters after visiting the Albemarle site in La Negra, about 30 minutes southeast of Antofagasta (LON:), that growing demand for clean energy could generate around $3 trillion in global investment opportunities through 2050.

Expanding ties between the United States and Chile would benefit both countries, improve energy security and help achieve key climate goals, he said, noting that one of the main goals of the U.S. Inflation Reduction Act is to reduce excessive dependence on strategic goods, including critical minerals, from China.

Yellen said the United States wants to expand domestic production and find other sources of critical minerals such as lithium, needed to power electric vehicles.

“We definitely want to acquire minerals from our free trade partners, particularly from a country like Chile that produces with great environmental sensitivity and has its own strong climate agenda,” Yellen said.

He said increased lithium purchases would likely increase U.S. imports from Chile and increase its share of Chilean exports. China is now Chile’s largest export market.

“I can’t tell you the numbers, but I imagine we will substantially expand our purchases from Chile,” he said.

Yellen’s visit to Chile is part of a broader push called “friendshoring” to diversify U.S. supply chains by strengthening ties with key allies and partners like Chile.

Washington has a strong interest in Chile as the world’s largest and second-largest producer of lithium, both key components of the green transition.

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He told reporters Friday that the United States wants to expand its trade flows with Chile, not dissuade it from trading with China, its largest trading partner, adding: “It’s not a competition.”

Yellen said Chile’s leading role in copper production is critical, noting that demand is expected to double by 2035, as the metal is needed for everything from electric vehicles to offshore wind turbines and transmission grids.

With 30% of the global market share and the largest lithium reserves, Chile is also the world’s second largest producer of lithium, demand for which is expected to triple by 2030, given its key role in energy storage, such as batteries of electric vehicles.

Chile’s 20-year free trade agreement with the United States means critical minerals from Chile help vehicles qualify for clean vehicle tax credits under the Inflation Reduction Act, which Yellen says would boost industries in both the countries.

He said Albemarle’s investment in Chile showed the benefit of expanded ties, noting that the North Carolina-based company has two sites in Chile that employ 1,000 people: a manufacturing site in Salar de Atacama and a conversion to La Negra.

There would be changes in the medium to long term as the United States accelerates lithium production in the United States, Yellen said, citing a planned Albemarle lithium mine expected to open in North Carolina by 2030 and a separate mine and a processing plant in Nevada that broke down. land a year ago.

Yellen said Chile was working on recommendations as part of a new national lithium strategy, and said her goal is to ensure that “we don’t end up in a situation where one country totally dominates production.”

He said he could not comment on the details of the emerging regulatory framework, but noted that companies like Albemarle see “a very bright future” ahead in Chile.