The recent withdrawal of Chinese companies BYD and Tsingshan from strategic lithium projects in northern Chile is a serious blow to the government’s National Lithium Strategy. Despite Finance Minister Mario Marcel’s efforts to downplay the impact, the situation raises critical questions about Chile’s investment climate and bureaucratic efficiency.
The companies had secured contracts through a competitive bidding process, with BYD planning to invest nearly $290 million in a lithium cathode plant. However, the project stalled due to what BYD described as bureaucratic bottlenecks and delays in the handover of land. Tsingshan, for its part, failed to even legally establish itself in Chile, suggesting structural challenges from the outset.
Minister Marcel acknowledged the companies’ exit, noting that the issues went “beyond difficulties with the government” and citing current lithium market conditions as a key factor for BYD. However, the contradiction between his remarks and the firms’ public complaints suggests a deeper misalignment between policy design and execution.
“Some projects don’t materialize, but others of greater scale are advancing,” Marcel said, affirming that the lithium strategy remains intact. He added that new extraction projects tied to Albemarle’s contract will move forward in May.
Yet these reassurances do little to mitigate the damage. The departure of two high-profile foreign investors sends a concerning signal to global markets: Chile, despite its vast lithium reserves, may be too slow or unpredictable to secure major industrial development.
Without swift and structural adjustments to reduce red tape and increase investor certainty, the government risks eroding confidence in a sector crucial to the global energy transition. Words alone won’t be enough—execution will define the success or failure of Chile’s lithium ambitions.