SANTIAGO, Jan 27 (Reuters) - World No. 1 copper producer Chile will consider boosting the development of its lithium industry through public-private partnerships, though the state would retain control of the mineral, a government-funded commission said on Tuesday.
With one of the largest lithium reserves on the globe, Chile is already the second-biggest producer of the mineral, which is widely used in products ranging from hybrid vehicles to smartphone batteries.
Development of lithium has been stunted by a constitutional ban on concessions. Companies are allowed to rent lithium-producing properties, but the mineral never belongs to the firm. Special contracts for lithium production, however, are legally permitted.
"The National Lithium Commission proposes a public policy that would allow for the adequate productive development of the country's lithium industry through public-private partnerships, protecting the Chilean state's control of the mineral," the government said in a statement.
According to the commission, global lithium demand is expected to jump to 158,000 tonnes per year by 2018 and to between 250,000-300,000 tonnes by 2020, from a current 95,000 tonnes.
"The mineral is set to be the energy of the future, as it has three potential markets: nuclear fusion reactors, high-capacity secondary batteries for electric cars, and light aluminum-lithium alloys, that allow for materials that are 10 percent lighter than conventional alloys," the government said.
In 2012, an auction of contracts for the right to explore and produce lithium in Chile ended embarrassingly, with the winner of bidding process, fertilizer producer SQM, having its rights to develop a new concession revoked after a rival bidder challenged the terms of the deal. (Reporting by Fabian Cambero; Writing by Anthony Esposito; Editing by Meredith Mazzilli)