Chinese Investments in Lithium in Chile: Interview with Tania Pierotic, CORFO Official

Tania Pierotic

In 2024, the Saint Pierre Center for International Security (SPCIS) launched a new program on China and Latin America: Conversations with Regional Scholars, aiming to explore China’s growing influence in Latin America through in-depth dialogues with regional experts. This initiative seeks to understand how Latin American scholars perceive China’s economic, political, and strategic presence, as well as its implications for regional development and international relations. The conversations are shared on SPCIS social media platforms. This discussion focused on China’s expanding economic footprint, the evolving geopolitical dynamics between China, the U.S., and Latin America, and the strategic responses of regional actors to these changes.

On this occasion, Tania Pierotic, an official from the Chilean Corporation for the Promotion of Production (CORFO), was interviewed by Chilean scholar Joaquín Sáez. The interview focused on the role of Chinese companies in the lithium industry in Chile, considering the new approach of Chile’s National Lithium Plan for energy transition and the characteristics of Chinese foreign direct investment (FDI) in the country.

Chinese companies have been expanding their presence in Chile’s lithium sector, securing contracts and making strategic investments. To better understand this dynamic, we spoke with a CORFO official, the entity that oversees lithium extraction agreements in Chile. This conversation sheds light on the advances, challenges, and long-term outlook of Chinese participation in Chile's lithium industry.

Sáez: Could you give an overview of CORFO’s role in Chile’s lithium industry?

Tania Pierotic: CORFO holds the mining exploitation rights in the Salar de Atacama, where the two main lithium producers, SQM and Albemarle, operate under contracts with us. These agreements extend until 2032 and 2043, respectively. Our role includes overseeing these contracts and ensuring compliance with national policies such as the National Lithium Strategy, which promotes local value-added production of lithium resources.

In 2023, two Chinese companies, BYD and Tsingshan, were selected as Specialized Lithium Producers following President Boric’s visit to China during Chile Week. We own the lithium and thus launched a Request for Information to invite foreign companies to participate in the exploitation of lithium in the Salar de Atacama. Companies are required to build lithium processing facilities to produce lithium carbonate, which only adds a modest value and is not considered advanced value addition. The duration until 2032 limited interest, and only these two Chinese companies were awarded quotas. We could revoke the bids, but we won’t—for now, as the process is still developing.

Sáez: Regarding the National Lithium Strategy, how does it influence foreign investments, especially from China?

Tania Pierotic: The strategy aims to go beyond the export of raw lithium, requiring value-added processing, like lithium carbonate production within Chile. This was the basis for BYD and Tsingshan’s contract awards. These companies received preferential lithium quotas from SQM but must process the material locally instead of exporting raw materials. It’s very likely these firms saw the National Lithium Strategy as a pilot, with China’s participation establishing a significant presence in Chile’s mining industry, potentially supporting their future global value chain plans.

Sáez: Have these projects progressed as expected?

Tania Pierotic: Progress has been slower than expected. Although both companies maintain their status as specialized lithium producers and are completing the necessary administrative procedures, there’s a clear gap between their commitments and the speed of implementation. They know Chile, Argentina, and Bolivia have vast lithium reserves and want long-term relationships based on FDI to ensure access. Also, access to strategic resources like lithium must involve the state. However, the issues of technology transfer and energy transition have shown that the Chinese strategy for adding value abroad is underdeveloped. Producing only lithium carbonate is insufficient projects must advance with more innovation. We are not producing lithium batteries or electric cars, and that’s the expectation for these projects.

Sáez: Do you think the contract duration affects investor interest?

Tania Pierotic: Definitely. Chinese companies might view the 2032 deadline as too short for large-scale mining projects, leading to uncertainty about long-term profitability. That may explain why only two companies participated. Additionally, Chinese firms typically refine raw materials domestically, not abroad, which clashes with our public policy goals. We’re trying to foster industrial development to compete with producers like Australia.

Sáez: How does Chile’s lithium market compare to Argentina’s in terms of investment appeal?

Tania Pierotic: Argentina offers longer or indefinite contracts, and its provinces have more negotiation autonomy, resulting in more developed partnerships. This flexibility is attractive. However, Chile has larger reserves, a stable regulatory environment, and higher production volumes, as its industry is tied to copper and now lithium, making it strategic for companies seeking long-term supply chain stability. Many narratives stress Chile’s importance to China, but these have remained mostly rhetorical.

Sáez: What can you say about China’s broader investment strategy? What role does lithium play?

Tania Pierotic: China’s strategy focuses on securing as many lithium contracts globally as possible. There’s high interest in Albemarle’s upcoming quota tender and new extraction opportunities from the Ministry of Mining. This aligns with China’s goal to control lithium supply chains for its battery and electric vehicle industries. All FDI create jobs, potentially boosting technical cooperation. CORFO seeks to develop a narrative that maintains pressure on all foreign companies—not just China—to provide value-added proposals. Still, we must also create an attractive investment environment, and this is new—we lack precedents in Chile for such processes.

Sáez: Has there been progress towards higher value-added production, such as battery manufacturing in Chile?

Tania Pierotic: Not yet. So far, Chinese companies have only committed to lithium carbonate production, without moving to more advanced stages like cathode or battery manufacturing. Their traditional model focuses on refining and manufacturing in China or markets like Indonesia. Chile could become a regional electric mobility hub, but we haven’t seen firm commitments. Still, there have been announcements. We need a new paradigm with mutually beneficial investment plans. We also need a screening system for investments—they shouldn’t just be cheap bids but must also offer long-term cooperation.

Sáez: Has the Chinese embassy played a role in facilitating investments?

Tania Pierotic: Their role has been mostly diplomatic. One challenge is the lack of transparency in data on job creation and technology transfer from Chinese investments. Unlike other foreign investors, Chinese firms face more scrutiny in the media and must communicate their benefits to Chile more actively. Hence, international standards like ESG or responsible business conduct are increasingly important.

Sáez: Are there cultural or structural barriers that hinder stronger cooperation between China and Chile?

Tania Pierotic: Yes. Chinese investment is often transactional, focused on securing contracts rather than long-term local engagement. Chile is moving towards requiring value-added commitments, and we’ll see how Chinese firms adapt. Tenders are also evolving, and bureaucratic processes are changing. We are countries with a long diplomatic history but entering a new economic cycle, where we must work through structural differences.

Sáez: What are the expectations for continuing the National Lithium Strategy?

Tania Pierotic: It will be a critical test. The new process prioritizes value-added proposals over the lowest bid, representing a shift in traditional tender criteria. This requires companies to align with Chile’s new investment model.Investment standards are now demanding and promote green investment, like green hydrogen, and new international calls adapted to climate change standards.We must be more competitive and provide clarity on promoting quality FDI.

A communication strategy is needed to show the project’s sustainability. Since two Chinese firms are now Specialized Lithium Producers, the strategy must justify their selection and push for the rapid installation of cathode factories—otherwise, it undermines the project. It’s no longer just about legal frameworks but about creating a lasting culture of technology transfer.

The strategy must generate synergy between foreign company standards and the Chilean state. To compete in the Lithium Triangle, we also need to diversify actors and bring in investment from other countries.

Sáez: Finally, what do you think the future holds for lithium cooperation between China and Chile?

Tania Pierotic: It depends on how China adapts.If they adopt Chile’s value-added requirements, the relationship could strengthen, especially with a focus on sustainable development. But if they continue to prioritize raw material extraction over local development, their competitiveness may decline, as Chile seeks to move away from the extractivist model.The coming years will show whether China can adjust its investment approach to align with Chile’s long-term vision and create a new model.

Conclusion

As Chile implements policies requiring more local value-added production in lithium extraction, Chinese investors will need to adjust their strategies to create synergies across expectations.

Although China remains a dominant player in the lithium market, its ability to secure long-term investments in Chile will depend on its willingness to engage in deeper industrial development, beyond exporting raw materials, and creating a long-term plan to enhance Chile’s industrial capacities in the lithium industry.