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By Dave Sherwood

SANTIAGO (Reuters) – Chile’s top lithium regulator is preparing to slash the red tape that investors have long said stymies output and new projects in the world’s No. 2 producer of the ultralight battery metal, the head of the watchdog told Reuters.

Jaime Salas, director of Chilean nuclear agency CCHEN, said in an interview in his Santiago office that the agency would shortly roll out revamped guidelines that make clear and transparent to newcomers how it determines lithium quotas, and also spell out how those rules will be enforced.

Chile has lost ground in recent years to rival lithium producers, with no new projects coming online despite huge reserves of the electric vehicle battery metal and soaring global demand. Investors blame opaque rules governing the sector.

“The interest of the entire state is to improve transparency, so that companies… have full understanding of what is required of them,” Salas said.

However, he dismissed the investor complaints that existing state regulations were a significant stumbling block for newcomers.

“That has no basis in reality,” Salas said. “Companies that have requested an authorization have obtained it. There is no one who has been left out of the process.”

Of seven projects approved for export, only sector leaders SQM and Albemarle are utilizing their permits, he said. The five others, including two from state-run copper miner Codelco, have yet to start production despite holding a CCHEN authorization.

“I have a hard time finding any limitation generated by the state,” Salas said.

CCHEN’s seal of approval, as well as environmental permits, are required of all producers wishing to sell or export lithium from Chile.

But Chile also requires newcomers to either partner with the state, as SQM and Albemarle have done, or obtain a special, separate permit from the mining ministry known as a CEOL to mine lithium on their own.

The mines ministry has repeatedly promised to clarify those rules as well, part of a broader effort to ramp up investment in the sector.

Chile’s mining and economy ministries also took part in the review of CCHEN’s protocols, Salas said.

(Reporting by Dave Sherwood, editing by Adam Jourdan and Rosalba O’Brien)