Chile's 'Right Turn' Sends Shockwaves Through the Global Lithium Industry

In December 2025, far-right candidate José Antonio Kast was elected President of Chile, marking the country’s political shift from radical left-wing to extreme right-wing within just four years. This change of government has drawn intense global attention—primarily due to Chile’s unique status as the 'heart of lithium resources': it holds 40% of the world’s lithium reserves; in 2025, its lithium output reached 56,000 tons, and its lithium carbonate supply accounted for nearly 40% of the global total. The new administration’s policies will directly reshape the global lithium industry landscape. The New President: A Right-Wing Political Shift Kast’s victory was highly controversial—he openly endorses certain economic policies of former military dictator Augusto Pinochet, making him the first Chilean president since the country’s democratic transition in 1990 to bear clear imprints of the military regime era. His policy platform stands in sharp contrast to that of outgoing leftist President Gabriel Boric, especially in foreign affairs, where he leans toward closer alignment with the United States and other right-wing governments in Latin America—laying the groundwork for a potential shift in lithium policy. Lithium Policy Shift: From State-Led to Market-First At the core of Kast’s governance is a decisive break from Boric’s ‘state intervention’ approach, returning instead to a ‘market-first’ philosophy—a shift with the most profound implications for the lithium sector. As the world’s second-largest lithium producer, Chile’s lithium policy directly determines the stability of the global supply chain. Under Boric’s administration, the government aggressively promoted a state-led lithium industry model, mandating state-owned enterprises hold controlling stakes in all new lithium projects and pushing for a joint venture between state-owned Codelco and SQM to lead development—introducing significant uncertainty for foreign investors.

Tianqi Lithium: Profits Soar by 1,800%!

The facts confirm that Tianqi Lithium made the right bet. The impact of this acquisition was immediate and dramatic: after spending RMB 28 billion, Tianqi secured an exceptionally stable and robust lithium ore supply. In the very year of the acquisition, SQM alone supplied 13% of the world’s lithium ore, while Talison—the lithium mine Tianqi had previously acquired—supplied 27%. In other words, Tianqi gained control over 40% of global lithium ore supply. SQM itself performed exceptionally well, delivering consistently strong financial results. Between 2018 and 2025, SQM’s revenue rose from RMB 13.45 billion to RMB 32.53 billion, and its net profit surged from RMB 1.942 billion to RMB 4.181 billion. During the lithium industry’s peak cycle in 2022, SQM’s revenue and net profit soared to RMB 71.442 billion and RMB 26.056 billion respectively—equivalent to roughly RMB 200 million in daily revenue and RMB 70 million in daily net profit. Against this backdrop, over the eight years following the acquisition (2018–2025), Tianqi received a total of RMB 12 billion in investment income from SQM—accounting for 20.5% of Tianqi’s cumulative net profit over that period. The contribution of SQM to Tianqi’s profitability became even more critical during periods of broader industry weakness. In 2024, amid a steep lithium price collapse, Ganfeng Lithium—a fellow lithium giant—recorded a loss of RMB 2.63 billion. By comparison, Tianqi’s loss of only RMB 29.24 million appeared relatively mild—largely thanks to RMB 890 million in investment income generated by SQM. Thus, the boost to Tianqi’s net profit in Q1 2026 from SQM-related investment income was not an isolated event—but rather part of an established pattern. Yet the question remains: can this favorable situation continue into the future? Chile Moves Toward Lithium Nationalization Tianqi Lithium: Break or Be Broken Fast-forward to 2023—the fifth year after Tianqi’s high-profile acquisition—and Chile suddenly announced it would mandate state-owned enterprises to lead or co-participate in all future lithium projects. In May 2024, Chile’s state-owned copper company Codelco signed a cooperation agreement with SQM, aiming to merge a Codelco subsidiary into an SQM subsidiary to jointly develop the Atacama Salt Flat lithium deposits—widely regarded by Tianqi as its most prized asset. Upon hearing the news, Tianqi did not remain passive: it attempted legal challenges—but all efforts ultimately failed. In December 2025, the matter reached its conclusion: Codelco and SQM established a joint venture, Nova Andino Litio SpA, agreeing that this entity would exclusively operate the Atacama Salt Flat from 2030 through 2060. Notably, Codelco holds a 51% equity stake in the joint venture—giving it controlling rights. This means SQM will lose control over the Atacama Salt Flat starting in 2031. For Tianqi—which had paid a huge sum specifically to acquire SQM shares largely on the basis of SQM’s control over the Atacama Salt Flat—this development amounted to nothing short of catastrophic news. Consequently, Tianqi decided to reduce its equity stake in SQM. In February 2026, the company announced it would divest approximately 1.25% of its SQM shares—carrying a book value of about RMB 1.444 billion.

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