Chile lithium move latest in global resource nationalism trend

President Gabriel Boric stated Thursday that he will nationalize Chile’s massive lithium industry to help the economy and safeguard the environment.

The surprise revelation comes amid rising competition for energy transition materials.

Global government efforts to control natural resources:

Chile, home to the world’s largest lithium reserves, will gradually transfer management of its extensive lithium operations from SQM (SQMA.SN) and Albemarle (ALB.N) to a state-owned corporation.

Chile is the second-largest lithium producer in the world.

Chile’s finance minister submitted a tax reform plan last July that hikes copper mining royalties on enterprises that generate more than 50,000 tonnes a year and taxes high-income earners, increasing public participation in mining income.

Despite industry opposition, a Chilean legislative committee adopted the mining royalty measure in January.

MYANMAR * In April, Myanmar’s ethnic minority Wa militia announced it would cease all mine work in regions it controls from August, raising tin prices, a semiconductor and electronics ingredient.

Last year, Myanmar supplied 77% of China’s tin ore. According to the International Tin Association, the Wa-controlled territory produced approximately 70% of Myanmar’s tin in 2022.

Indonesia, a resource powerhouse, is strengthening material controls to boost downstream operations and value.

Indonesia, one of the world’s largest nickel exporters, halted ore exports in June 2020 while it developed a whole nickel supply chain, from extraction to metals and chemicals used in batteries to electric vehicles.

After the world’s top tin exporter halted shipments of many other metals to develop more processing at home, President Joko Widodo announced Indonesia was considering a ban on tin exports and calculating its potential impact last October.

Widodo announced in December that bauxite exports would be banned in June 2023 to stimulate domestic processing of the principal resource of aluminum.

At an economic symposium, he indicated further export bans would be issued in the future years to promote resource processing onshore.

After nationalizing lithium deposits in April 2022, Mexican President Andres Manuel Lopez Obrador signed a decree in February transferring lithium holdings to the energy ministry.

ZIMBABWE * Zimbabwe banned unprocessed lithium exports in December 2022 to deter artisanal miners from digging up and exporting the ore.