Chile is nationalizing new lithium production, vowing "no more mining for the few"

Chilean President Gabriel Boric plans to nationalize the country's lithium production in 2023. This comes as China is also Nationalizing new lithium production.

Chile is nationalizing new lithium production, vowing "no more mining for the few"

In a national televised speech on Thursday (20 April), Chilean President Gabriel Boric announced his plans to nationalize lithium production.

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Any new lithium project will be required to have public-private partnerships managed by the government.

Boric said that while existing contracts with private firms will not be voided they are optimistic about new terms being negotiated in line with policy.

This is our best opportunity to transition into a sustainable, developed economy. Boric said that we can't afford it to be wasted, citing its role in increasing electric vehicle battery production.

Many developing countries have politicized lithium due to its importance in the energy transformation. They see nationalized lithium reserves as an opportunity to gain more control in global economies and to extract wealth from developed countries looking to meet their green energy quotas.

Chile is the country with the second largest lithium reserves discovered (behind Bolivia), and the second largest lithium production (behind Australia).

Mexico announced recently that it would nationalize the lithium reserves found in Sonora Desert. Bolivia's state owned mining company, Contemporary Amperex Technology, signed a deal worth a billion dollars with Chinese-owned Contemporary Amperex Technology for a new lithium battery partnership.

At 3:30 pm Friday, the share prices of US-based Albermarle Corporation - the world's biggest lithium company with major operations in Chile - had dropped by over 10% in New York.

Boric's choice builds on the legacy left by his political hero, Salvador Allende. Allende, a major nationalization proponent, was elected in part on the platform of nationalizing large industries and redistribution of wealth.

Allende was president when he successfully nationalized Chile's copper production, banking, healthcare, and the healthcare industry. In the 1970s, copper was the main industry of Chile. Now, lithium is the equivalent in terms infrastructure and demand.

The US was furious at Allende's plan to nationalize all mines, including US copper interests. As a result, the US cut off all bilateral commitments for economic aid to Chile and actively backed Allende's political rivals.

After that failed, US President Richard Nixon ordered the overthrow of Allende's democratically elected government. He told CIA Director Richard Helms to “save Chile”.

It wasn't long. Augusto Pinochet, who had been Allende’s president for just three years at the time, led a violent takeover against his government on September 11, 1973. He imposed himself as dictator while destroying Allende’s economic reforms.

In a recorded telephone call, Nixon and Secretary Henry Kissinger boasted about laying the groundwork for the coup, but regretted that they could not publicly claim credit.

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Latin America is aware that the world needs more lithium than ever.

India's lithium deposit is a major find, making it an important player in the battery and electric vehicle industries.