Chilean lithium products are set to benefit from tax breaks in the United States, following a new inter-governmental agreement. This development has raised hopes for increased investment in South America’s metal and energy transition supply chains.
According to Chile’s economy ministry, lithium products will be included in the provisions of the US Inflation Reduction Act (IRA). This inclusion will allow Chile to export primary lithium materials to the US, as well as cathode materials and higher-value lithium by-products.
The US IRA, enacted in 2022, offers tax incentives and other benefits aimed at strengthening battery and energy transition supply chains across North America.
Chile, which holds the world’s largest lithium reserves, is the second-largest producer of lithium, after Australia. In 2023, Chile’s lithium production reached 225,000 tons of lithium carbonate equivalent.
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