The point of this move is to move the country higher up in the processing and profit chain because right now they are not the ones processing the lithium or making the batteries. They are in a unique position and this absolutely is the best move for them. The biggest loser for this is China. Chile is aiming to eat their (EV) lunch.
> Future lithium contracts would only be issued as public-private partnerships with state control, he said.<p>> The government would not terminate current contracts, but hoped companies would be open to state participation before they expire, he said, without naming Albemarle and SQM, the world's No.1 and No.2 lithium producers respectively.<p>This is very different from what I was expecting with the word "nationalize". Unless they're seizing property that isn't mentioned in the article.
The thing about lithium is that it still isn't as big or valuable of a market as some headlines might make you believe. Chile exports, per the graph, about $900M worth of lithium per annum. For comparison, they also export about $33B worth of copper. And about $2B of wine. Pretty decent wine, I might add.<p>So it's not such a surprise that Chile is taking a very slow approach with this "nationalization". Mining doesn't usually grow at the speed of software. Plus, competition will arise. The quantity of known lithium resources globally <i>doubled</i> from 2014–21:<p><a href="https://bibliotekanauki.pl/articles/2090756.pdf" rel="nofollow">https://bibliotekanauki.pl/articles/2090756.pdf</a><p>To some extent, nationalizing lithium is as much a publicity stunt as it is an economic policy.
This public-private partnership approach is likely weak enough to not significantly impact the profits of the multinational mining companies. Or Gabriel Boric is overconfidently playing his hand because a similar move in the past would get you dropped from a CIA helicopter over the ocean.
More details and background:<p><a href="https://seekingalpha.com/article/4595845-chilean-lithium-nationalization-albemarle-sqm" rel="nofollow">https://seekingalpha.com/article/4595845-chilean-lithium-nat...</a>
Good to see countries realize that if they just export raw materials and don't do any industrial processing locally, then they are mere colonies of a foreign power.<p>Even if the bigger part of the profits travels abroad, if the industrial knowledge stays in the country and also has a network effect on other industries and businesses, then it's a win on it's own.<p>Specially in this case where I doubt Chile even has the know-how and funds to explore the lithium on their own without foreign help.
1. Good on them.<p>2. Too bad they let foreign companies exploit their natural riches so far. But of course - that was how world powers set up their colonies everywhere, and it's been mostly the same with neo-colonies (which are supposedly sovereign, but foreign companies and governments call most of the shots).<p>3. I just wish the export profits are distributed more fairly, effectively and reasonably (which, right now, I somewhat doubt).<p>4. Lithium alternatives for batteries are being actively worked on and there's a lot of potential in some of these. Here is a survey of 5 examples:<p><a href="https://www.youtube.com/watch?v=n1TBAWlbXKI">https://www.youtube.com/watch?v=n1TBAWlbXKI</a>
To the Austrians out there: you can theorize and even model scenarios where this is not only a bad but a terrible idea but I would like to point out some empirically successful government institutions of managed resources in free parts of the world:<p>Fannie and Freddie, TVA, Statoil, just to name a few. These effectively manage limited resources, are profitable, and the windfall does not end up in private hands.<p>Yea, the commies accidentally created famines, but the root cause was their refusal to engage with anything other than their theories and model… which, should sound like the former issue raised with their economic counterparts…