Chile, the world’s second-largest producer of lithium, announced plans last week to bring the country’s vast lithium reserves under government ownership. The move is part of a wider trend of governments seeking to keep a bigger cut of critical minerals within their borders in response to the growing demand for electric vehicles and other technology reliant on these materials. Chile would transfer control of its lithium reserves from industrial giants SQM and Albemarle Corporation to a government-owned company, modelled on the state-owned copper miner. The government’s plans are part of President Gabriel Boric’s wider attempt to overhaul lithium production and remake Chile into a Nordic social democracy with a higher perch in lithium’s global value chain. If successful, Chile would become the third Latin American country to nationalise its lithium reserves and the one with the most advanced and active industry to do so yet.
Mexico made a similar move last year, passing a law that gave the government a monopoly over lithium mining. Bolivia had already nationalised its reserves almost two decades ago, while Argentina’s left-wing government has directed its own state-owned energy company to explore lithium mining but publicly ruled out nationalising the industry. It is still too early to say what impact Chile’s nationalisation plans will have on business, and lithium mining companies, run by both national and international firms, have yet to give detailed reactions. The lithium triangle of Argentina, Bolivia, and Chile currently contains over 54% of the 98 million metric tons of the metal identified in reserves worldwide. Seaver Wang, a researcher at California’s Breakthrough Institute, has said an OPEC of lithium is unlikely as these countries do not “corner the market” on lithium, and cites the U.S. and Australia as two companies that could not be controlled by such a cartel.