In a move likely to spur further investment in South America's burgeoning metal and energy transition supply chains, Chilean lithium products will soon benefit from tax exemptions in the United States. This development follows a newly forged inter-governmental agreement, as announced by Chile's economy ministry.
The United States' Inflation Reduction Act (IRA), a legislative milestone enacted in 2022, will now encompass Chilean lithium products. This inclusion facilitates the export of primary lithium materials from Chile to the US, in addition to cathode materials and other high-value lithium by-products.
The IRA's tax breaks and incentives are designed to enhance battery and energy transition supply chains throughout North America, a strategy that aligns well with Chile's position as a global leader in lithium production. Boasting the world's largest lithium reserves, Chile stands as the second-largest lithium producer globally, trailing only Australia. In 2023, Chile's output of lithium carbonate equivalent reached a substantial 225,000 tons.
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