Why Gabriel Boric set aside old quarrels to sign a massive lithium deal

Signing a broad-reaching lithium mining deal with a firm questioned for its ties with Augusto Pinochet’s dictatorship was not what supporters envisioned when they cast their votes for left-winger Gabriel Boric in 2021.

But the 38-year old president recently announced that his government would be joining forces with the private sector to extract lithium from the Atacama salt flat, a significant reservoir of the metal, in an effort to reverse an expected decline in market share in coming years.

And its partner would be no other than Sociedad Química y Minera (SQM), a publicly-traded lithium miner that was maligned for decades due to being owned by Mr. Pinochet’s former son-in-law, Julio Ponce Lerou, not to mention the multiple lobbying and campaign financing scandals it was involved in since the return of democracy.

Mr. Boric said that state-owned mining giant Codelco sealed a preliminary agreement with SQM to take a controlling stake in a new joint venture for upcoming lithium projects in northern Chile, highlighting the deal as a positive compromise that follows the introduction of the National Lithium Strategy in early 2023, which requires all new lithium initiatives to commence as collaborations between the state and the private sector. 

“It is an unprecedented milestone in the Chilean mining industry and a concrete step towards achieving fair and sustainable development,” the president said. “This way, we fulfill our commitment to ensure the state’s participation in...