Yellen sees big jump in US imports from Chile

LA NEGRA, Mar 03 (Reuters): US Treasury Secretary Janet Yellen on Saturday predicted expanding demand for lithium - a core component needed in batteries for electric vehicles - would boost US imports from Chile substantially in coming years.
Yellen toured US lithium producer Albemarle in northern Chile on Saturday as she wrapped up a visit to Chile that included meetings with President Gabriel Boric, Economy Minister Mario Marcel and business executives in Santiago.
She told reporters after visiting the Albemarle site in La Negra, about 30 minutes southeast of Antofagasta, that rising demand for clean energy could generate some $3 trillion in global investment opportunities through 2050.
Expanding US-Chilean ties would benefit both countries, improve energy security and help achieve key climate goals, she said, noting that a core goal of the US Inflation Reduction Act is to reduce overdependence on strategic goods, including critical minerals, from China.
Yellen said the US was keen to expand domestic production and find other sources of critical minerals like lithium needed to power electric vehicles.
"We want to certainly acquire minerals from our free trade partners, especially a country like Chile that is producing with great environmental sensitivity and has its own strong climate agenda," Yellen said.
She said increased purchases of lithium would likely increase US imports from Chile and increase its share of Chilean exports. China is now Chile's biggest export market. "I can't tell you numbers, but I imagine that we will be expanding substantially our purchases from Chile," she said.
Yellen's visit to Chile is part of a broader push dubbed "friendshoring" to diversify US supply chains by bolstering ties with key allies and partners such as Chile.
Washington has a strong interest in Chile as the world's largest producer of copper and the second largest producer of lithium, both components critical to the green transition.
She told reporters on Friday that the US wanted to expand its own trade flows with Chile, not dissuade it from trading with China, its biggest trading partner, adding, "It's not a competition."
Yellen said Chile's lead production role in copper was critical, noting that demand is projected to double by 2035, since the metal is required for everything from electric vehicles to offshore wind turbines and transmission networks.
With 30 per cent of global market share and the largest lithium reserves, Chile is also the world's second biggest producer of lithium, which is expected to see a tripling of demand by 2030 given its key role in energy storage, such as for EV batteries.
Chile's 20-year-old 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 said would boost industries in both countries.
She said Albemarle's investment in Chile showed the benefit of expanded ties, noting the North Carolina-based company had two sites in Chile that employ 1,000 people: a production site in Salar de Atacama and a conversion plant in La Negra.
There would be shifts in the medium to long term as the US ramps up lithium production in the United States, Yellen said, citing a planned Albemarle lithium mine due to open in North Carolina by 2030 and a separate mine and processing facility in Nevada that broke ground one year ago.