By Adriano Marchese


Shares of Lithium Chile Inc. were down Friday late morning after Chile's president, Gabriel Boric, said his government plans to take majority stakes in any new lithium production.

The Chilean president said existing contracts to mine the metal would be respected, but that Chile's state-owned copper miner, Codelco, would hold talks with lithium producers to secure government stakes in them before the contracts expire.

The Toronto-listed lithium producer, which has several lithium projects in Chile, said it welcomes the news that the government doesn't plan to terminate current contracts, and that the developments will have a positive effect on their business.

"The proposed initiative by President Boric to improve the domestic economy by advancing the lithium industry with state involvement will create a transparent way for private companies to explore and develop their assets," Lithium Chile said.

Investors didn't immediately share the optimism, with the stock falling by nearly 11% to 68 Canadian cents, or 50 U.S. cents.

Lithium Chile has a large land portfolio in the country, with 111,978 hectares of lithium-bearing properties and drilling slated to begin May on its Llamara project. The company also has 20,800 hectares in Argentina.


Write to Adriano Marchese at adriano.marchese@wsj.com


(END) Dow Jones Newswires

04-21-23 1209ET