Elon Musk Says Lithium Is Common Everywhere, Chile's Economy Minister Politely Corrects Him

Following Chilean President Gabriel Boric’s announced plans last Friday to nationalize the country's lithium industry and create a separate state-owned company to produce the metal, Tesla TSLA CEO Elon Musk replied blithely, essentially telling the Chileans their lithium mines aren't all that important.

Chile’s Economy Minister Begs To Differ 

"Chile has 40% of these reserves (...) there is great interest in the world for lithium and in particular for the lithium that we have here, it is tremendous," Nicolás Grau told Chile's Meganoticias on Saturday.

The economy minister noted that Chile is the world's second-largest producer of lithium and holds the world’s third-largest reserves of the metal, which is used to make electric vehicle batteries. In 2022, Chile accounted for nearly one-third of global lithium production, with its lithium mine output estimated at 39 thousand metric tons.

Need For Lithium Will Only Increase

Demand for lithium is expected to soar as the transition to renewable energy around the world and the growth in electric vehicles, an issue of great interest to Musk, which Grau says can be worked out.

"There are many things that can be done in line with what Elon Musk says. Now, I would say, with one caveat, that he is directly downplaying the relevance of having lithium."  

Musk Isn't Alone

Chile’s business sector also expressed concern after Boric's announcement. 

“We were quite disconcerted,” said Ricardo Mewes, head of the Confederation of Production and Trade, an association that represents Chile’s business community.

Meanwhile, Lithium stocks, including Albemarle Corp ALB, Sociedad Quimica Y Minera S.A. SQM, and Livent Corp LTHM plunged Friday. Warren Buffett-backed EV maker BYD Company (OTC: BYDDY) BYDDF is proposing to build a $290-million lithium cathode factory in Chile.