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The geopolitics of China in Chile’s lithium strategy and the trouble with critical minerals

On May 7th 2025, the Chilean government confirmed a report published earlier that morning: Chinese companies BYD and Yongqing Technology (Tsingshan Group) had abandoned their planned lithium cathode production facilities in Chile. This announcement dealt a significant blow to the ambitions of a country with a longstanding mining tradition, now striving to build industrial capabilities and develop value-added products from its mineral resources amid the global energy transition. However, just one day later, the Chinese embassy in Chile contradicted both the initial report and the Chilean government's confirmation.

However, just one day later, the Chinese embassy in Chile contradicted both the initial report and the Chilean government's confirmation. After consultations with both companies, the embassy clarified that neither had officially withdrawn their investment plans.

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