Yellen Sees Growing Trade With Chile, A Vital EV Metal Supplier

(Bloomberg) -- Treasury Secretary Janet Yellen said the US is likely to increase mineral imports from Chile, a key supplier of lithium used in the batteries that power electric vehicles.

Wrapping up a trade-focused visit to the South American country, Yellen said the US wants to acquire minerals from free-trade partners like Chile, which also produces with “great environmental sensitivity” and has a strong climate agenda.

“I can't tell you numbers but I imagine that we will be expanding substantially our purchases from Chile,” she told reporters Saturday after visiting an Albemarle Corp. lithium processing facility in the northern city of Antofagasta. “We've been talking about that throughout the trip.”

Yellen's trip was meant to strengthen ties with an ally rich in a metal that's essential to the Biden administration's electric vehicle vision.

“As we accelerate toward a clean energy future, our already strong economic relationship is poised for further strengthening,” Yellen said in a speech earlier Saturday.

The Treasury chief met with top officials in Santiago on Friday including President Gabriel Boric, Finance Minister Mario Marcel and Rosanna Costa, president of the central bank.

Chile has the world's largest reserves of lithium and is the No. 2 supplier after Australia. That also makes it a vital partner for China, by far the top global EV producer, which last year bought about two-thirds of Chile's lithium exports.

‘Friend-Shoring' 

The Biden administration is backing domestic EV plants with massive subsidies as it seeks to grab a bigger share of the industry. At the same time, it's pushing companies to secure materials from countries other than China.

“Parts of our key supply chains, including for clean energy, are currently over-concentrated in China,” Yellen said, adding that this makes the US more vulnerable to supply-chain shocks.

Earlier: US Bid to Loosen China's Grip on Key Metals for EVs Is Stalling

To mitigate that risk, the Biden administration has pursued a “friend-shoring” agenda to make US supply lines less dependent on China.

As a free-trade partner with the US for more than two decades, Chile stands to benefit from President Joe Biden's green stimulus program, potentially increasing demand for its lithium. Trade between the countries has grown about 9% a year since 2003.

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