Bets on Aussie lithium miners rise as Chile plan stokes concerns

MELBOURNE, Apr 24 (Reuters): Expectations that demand for Australian lithium will grow boosted Sydney-listed miners' stocks on Monday after Chile unveiled plans to take control of its output of the metal essential for electric vehicle (EV) batteries.
Listed miners with lithium projects in South America suffered, however, on concerns other governments may follow Chile's lead.
Elsewhere in Asia, lithium prices stabilised on an improved demand outlook, and Japan acted to shore up its EV minerals supply by announcing a swathe of industry subsidies.
Australia, the world's top lithium producer, makes up around half of global supply.
Last Thursday, Chile's President Gabriel Boric announced a move that would see the world's second-largest lithium producer shift to a model in which the state holds a controlling interest in all projects, partnering with mining firms.
"Chile's decision could slow down investment into the country, which is probably slightly positive for the lithium world, and it may force the majors to pour in more investment dollars outside of Chile," said Glyn Lawcock, head of resources at Sydney investment bank Barrenjoey.
"It probably makes Australian hardrock more valuable, because you are in a much more stable regulatory environment compared to Chile. Sure, there might be small increases in royalties payments from time to time, but we don't generally nationalise assets." Bucking the regional trend were Australian-listed miners with projects in South America's lithium triangle which spans Chile, Argentina and Bolivia, on concerns other governments may follow Chile's footsteps.
Lithium Power International, whose Maricunga brine project is Chile's largest permitted, proposed project welcomed the new policy which it said would "positively transform" Chile's lithium industry.
The nationalisation trend poses a challenge to EV manufacturers scrambling to secure battery materials, as more countries look to protect their natural resources and access to battery minerals supply.
In the latest move, Japan will subsidise half the cost of smelting and mine development projects of important minerals including lithium by Japanese companies, Nikkei Asia reported on Sunday.
Prices of lithium in Wuxi, China, which fell after news of the policy broke last week, rallied 14.8 per cent on Monday given expectations of an upcoming demand recovery.