17 ms·

Chile to Nationalize Lithium Industry

208 points by rib3ye 3y ago

williamcotton 3y ago
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: 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. 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…
- cmrdporcupine 3y ago
  > Yea, the commies accidentally created famines I'd actually argue the stalinists created famines not by accident but at least partially by intent. Their economic modelling and planning were terrible, yes -- in part because of ideological blindness you mention. But the existence of the NEP for a short period of time in the 20s shows that at least some of the Bolsheviks were able to demonstrate more flexible thinking. But they were also legitimately terrible, damaged, malevolent people who were the products of a nasty civil war. Starving their perceived enemies and brutalizing whole populations to do so was part of their MO.
  - williamcotton 3y ago
    Good points all around! The same general problem of recovering from a brutal civil war seems core to Maoists as well! Ideology and gunpowder make for a terrible brew.
    - cmrdporcupine 3y ago
      The first half of the 20th century was a cruel time and engineered cruel people, of all ideological stripes. 50 years of living with the consequences of WWI.
  - muro 3y ago
    I would say they were also a cause, not just a product of a nasty civil war.
    - cmrdporcupine 3y ago
      Not the Tsarist monsters who sent waves of young men to be butchered in WWI?
      - muro 3y ago
        Every country in WWI did that, no? Anf while didn't say they were the only cause, they certainly didn't try to minimise casualties.
        cmrdporcupine 3y ago
        My point is that the first act the Bolsheviks did was to end Russian involvement in WWI and end that slaughter. (At the cost of massive loss of territory and reprisal from western powers.) It ain't black and white.
        muro 3y ago
        That's a good point. I thought the Russian civil war was already happening at that time, so it enabled everyone in Russia to focus on that one alone. Is that incorrect?
        cmrdporcupine 3y ago
        Civil war happened a bit later, but I guess it's blurry because it was also mixed up with the foreign invasion / punishments that came out of the Soviet withdrawal from the war and Brest-Litovsk. The allies were enraged by the withdrawal from the war, but of course also extremely interested in destroying the new Bolshevik regime. So right away after 1918 they were thrown into a conflict setting. I'd have to defer to an actual historian here for the full details, but my understanding of the history is that the "whites" that the Bolsheviks fought in the civil war were funded and aided by foreign powers (Britain, etc.), and that that funding and intervention began the moment Brest-Litovsk was signed, but then later transitioned into the full civil war scenario. Of course it all depends on how you draw definitional lines around civil war vs revolution, etc.
  - bitL 3y ago
    Stalinists were trying to create economies of scale by centralizing agriculture to large conglomerates but weren't smart enough to avoid supply disruption that together with dry years, optimistic communication/lies and foreign export led to massive famines throughout the whole USSR. One can see the same pattern in large corps where the front falls suddenly off.
    - cmrdporcupine 3y ago
      But it was also bound up with ideological and ethnic campaigns against e.g. Ukrainian nationalists and the Ukrainian peasantry generally. Stalin was a big fan of collective punishment, repopulation, depopulation, etc. Sociopath. Resistance of aspects of the peasantry to collectivization, etc. became an excuse for brutal policies, independent of any theoretical "socialist" policy. Remember Marx (and even Lenin) wrote nothing about e.g. agricultural policy or even what socialization of industry would look like in practice. So these people (Stalin and his apparatus) were making it up as they went along, and they were awful people. e.g. Stalin came to power against Trotsky and the Left Opposition by insisting on maintaining the NEP and taking a more gradual and pragmatic approach and then turned around, exterminated his opponents, and did the precisely the opposite and forced mass collectivization (leading to mass starvation.)
- analog31 3y ago
  Moreover, it seems to me that with the amount of oversight needed to prevent the mines from laying waste to their surroundings and abusing their workers, and the anticipated bail-out when it goes bankrupt, the government might as well just run it.
- hackeraccount 3y ago
  I wouldn't hold up Fannie and Freddie as a model for anything.
  - williamcotton 3y ago
    Why not? They’ve created an insane amount of private wealth in the US and are profitable. FHA loans have caused more good than harm.
    - Kiro 3y ago
      For someone outside the US those names are only associated with the financial crisis. I don't even know what they are and honestly thought they were another Lehman brothers that didn't exist anymore, so your comment read like a joke.
      - mattmaroon 3y ago
        If it makes you feel better, most American home owners have a loan that originated with one of them and still don’t know any more about them than you do.
      - JauntTrooper 3y ago
        Fannie Mae (FNMA) and Freddie Mac (FHLMC) are companies that the US federal government set up and sponsors in order to support the mortgage industry and provide liquidity to banks and other financial institutions that provide mortgages to Americans. So if a bank offers a mortgage to a customer and the loan conforms with Fannie and Freddie's underwriting policies, Fannie and Freddie will buy it from them them. They then package some of those loans into a loan portfolio and sell it to fixed income investors. About 70% of US mortgages are supported by Fannie and Freddie.
        williamcotton 3y ago
        Unfortunately reality isn’t the point of these online exchanges.
  - 3y ago
- mughinn 3y ago
  The problem is that the State exists to abuse the rights of the people I don't understand how or why profits ending up on private hands is bad, you are a private hand and the State robs you all the time
  - andybak 3y ago
    > The problem is that the State exists to abuse the rights of the people The state exists for a multiplicity of reasons - some of which are harmful and some of which are beneficial. And if the state doesn't exist then other actors will step in to and will also do a mixture of harm and good. Any attempt to handwave away the nuance just sounds silly.
    - mughinn 3y ago
      The existance of the State is an infringement on your rights, any good that comes out of it isn't really an argument. It's akin as saying that killing all poor people would eradicate poverty, so it is harmful in some ways but it has some benefits Other actors would also be States, we the people should fight against all States, not just the current one
      - fmajid 3y ago
        Because human rights are so well-protected in Afghanistan, Somalia or other such failed states. The alternative to a functioning state is not some techno-anarchist utopia, its warlordism and feudalism. Even the Taliban were seen as preferable to that (they got their initial political capital by rescuing boys kidnapped by warlords to be used as catamites).
        malermeister 3y ago
        The techno-anarchist utopia is neo-feudalism. They just hope to be on top this time.
        mughinn 3y ago
- trompetenaccoun 3y ago
  It's about macroeconomics, it doesn't mean that you can not have the state run anything at all. Austrian economists are not anarchists. For example I can point to successful schemes in Saudi or China and still see that on the grand scheme of things private markets are a lot more efficient. You're pointing to the exception as a criticism of the rule. If they do it right this step makes a lot of sense for Chile. It doesn't negate the fact that socialist policies have economically ruined South America at large. Venezuela is the best example, it used to be the richest of them all not very long ago.
  - alvarezbjm-hn 3y ago
    Not "socialist policies" Populist dictators have ruined everything.
TradingPlaces 3y ago
More details and background: https://seekingalpha.com/article/4595845-chilean-lithium-nationalization-albemarle-sqm https://seekingalpha.com/article/4595845-chilean-lithium-nat...
nordsieck 3y ago
> Future lithium contracts would only be issued as public-private partnerships with state control, he said. > 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. 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.
- dmbche 3y ago
  "SQM's contract is set to expire in 2030 and Albemarle's in 2043." Worth noting! badtake/This looks like the national electricity model in Quebec, where the public absorbs risk and the private part of the private-public partnership absorbs profits. Just the best!/badtake Edit: looks like this is an outdated take - please diregard
  - nordsieck 3y ago
    Well, since these will mostly be foreign companies partnering with the government, I imagine that it'll be a little closer to the Chinese model, but maybe with a bit less IP theft.
  - icegreentea2 3y ago
    What's the private part of the Quebec model?
    - dmbche 3y ago
      Hydro quebec is the national energy "company", which is nationalised, but they give contracts to other companies to run parts of their operations - this happenes through multiple deals by one of our past prime minister. At this point, Hydro-Quebec is only directly responsible for a portion of the hydro we create, while it has let natural gas, wind turbines and possibly more to private companies. Edit: refer to my other comments, this is a bad take, hydro is not privately owned It's hard to research even for a french speaker though - I think I might reasearch and write something on it just to clarify my own opinions
rapsey 3y ago
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.
- kmfrk 3y ago
  Sounds like what Indonesia is also doing: https://twitter.com/70sBachchan/status/1587125692294201347 https://twitter.com/70sBachchan/status/1587125692294201347.
  - ochoseis 3y ago
    Here’s another guy talking about the same: https://youtu.be/BHFpGIwwh7M https://youtu.be/BHFpGIwwh7M
- 29athrowaway 3y ago
  But they don't have the resources to build the infrastructure to extract it in a profitable way. So likely what will happen is that China will do it and pay below market rate for the lithium. I would not be surprised if the entire Boric fiasco is just Chinese infiltration.
  - Cthulhu_ 3y ago
    That's one outcome, but they may find lots of companies and governments are willing to invest at more favorable conditions; the US is a logical candidate as well.
    - dandy23 3y ago
      Why would more companies/states be interested investing in Chile if Chile nationalizes and takes a bigger chunk of the profits than before?
      - 3y ago
cyclecount 3y ago
[flagged]
- pkaye 3y ago
  I'm sure the EU will fight them in the WTO. https://www.reuters.com/markets/commodities/indonesia-plans-appeal-after-losing-wto-nickel-dispute-with-eu-2022-11-30/ https://www.reuters.com/markets/commodities/indonesia-plans-...
wunderland 3y ago
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.
- alvarezbjm-hn 3y ago
  They haven't tried pushing Maduro out of a chopper. Although they put a bounty on his head and that didn't work.
  - pyth0 3y ago
    They did try to oust him with a failed coup [1] [1] https://en.wikipedia.org/wiki/Operation_Gideon_(2020) https://en.wikipedia.org/wiki/Operation_Gideon_(2020)
scythe 3y ago
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. 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 doubled from 2014–21: https://bibliotekanauki.pl/articles/2090756.pdf https://bibliotekanauki.pl/articles/2090756.pdf To some extent, nationalizing lithium is as much a publicity stunt as it is an economic policy.
- dandy23 3y ago
  And don't forget that those $900M are based on a very high lithium price. It has dropped since and very likely will drop more.
  - npsomaratna 3y ago
    What if they move up the value chain though, rather than simply exporting the lithium?
    - aeyes 3y ago
      They are trying: https://www.reuters.com/business/autos-transportation/china-ev-maker-byd-build-290-mln-battery-component-plant-chile-2023-04-21/ https://www.reuters.com/business/autos-transportation/china-...
- vlovich123 3y ago
  You’re talking about the lithium itself. Chile specifically is taking steps to go upstream to capture more of the value as well so that 0.9B number would be severely undercounting.
  - scythe 3y ago
    Chile would certainly benefit from having more battery manufacturing in its economy. They've recently joined the short list of countries where solar power is more than 10% of consumption — growing fast — and they still generate and consume much less total electricity than a typical developed country. This implies that they're going to end up with a very large solar fraction, and a need for stabilization. But you can't just make a battery out of lithium. You also need graphite and either nickel or iron phosphate. And you need some fine chemicals (the electrolyte). The good news is that Chile does produce some iron and phosphorus. But I don't think they currently produce much in the way of graphite or organic chemicals. I'm not sure, either, if they can process their iron and phosphorus ore into battery-grade iron phosphate. So it's not just "refining lithium". Lithium carbonate of commerce is already pretty pure. This isn't petroleum we're talking about. The danger is trying too hard to achieve autarky. The CPTPP (of which Chile is a member) at least in theory does have existing sources for those other components. But it seems like the Boric administration is skeptical of cooperation. Environmentalists are another potential barrier, since anything involving chemical engineering tends to get them riled up, justified or otherwise. By the way, I think you mean "downstream" when you say "upstream". Mines are generally the proverbial headwaters.
camillomiller 3y ago
This was news back at the end of April. Why is it emerging only now on here is a bit of a mystery.
- tenpies 3y ago
  Probably related to the constitutional referendum over the weekend, which the Left lost spectacularly[1]. I do find it funny that AP calls President Boric "centre left". --- [1] https://apnews.com/article/chile-constitution-kast-boric-plebiscite-referendum-4a3941e0541a9fee0c1b5976c0c6af40 https://apnews.com/article/chile-constitution-kast-boric-ple...
  - peterfirefly 3y ago
    At least the Left in Chile are trying to operate within the law this time around, very much unlike Allende.
    - peterfirefly 3y ago
      Apparently there are lots of people who don't know there were two coups in Chile: first Allende's and then the counter "coup" (because Allende had already been legally deposed but refused to leave his post).
ACV001 3y ago
This is very good and every country should to the same with all their natural resources!
derelicta 3y ago
Someone is gonna get coup'd
- r00fus 3y ago
  The US is too busy dealing about Ukraine/Russia and worrying about Taiwan/China to do a damn thing about it. China (#2 world power) has no foreign bases and prefers to economically control the countries through loans (economic coup - WMF/WorldBank style) - nationalized could still work for them but not as good terms. Saying "coup" is like those extremist YouTubers who threaten defamation lawsuits when you leak their dirty deeds - all hat, no cattle. The Monroe Doctrine is defunct now.
Ligma123 3y ago
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. 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. 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.
- kwere 3y ago
  setting up a whole industrial value chain from mine to manufacturing & servicing is not guaranteed to succeed in any shape or form, "forcing it" has historically only been pet projects for the hegemons of the time, and a lot still failed, like Soviet computing industry and now (probably) the PRC chip manufacturing (sudsidized with at least like 120 billion$)
sproketboy 3y ago
[dead]
FpUser 3y ago
>"It poses a fresh challenge to electric vehicle (EV) manufacturers " Why does it pose a challenge?
tehjoker 3y ago
Excellent. Let's hope the US can't do what we did to Salvadore Allende.
- randomopining 3y ago
  If Chile aligns with us that would be great. You do know that if the CCP take defacto control there, they would control the system much more than you think the big bad Americans do. Look at the surveillance apparatus they help deploy in their "aligned" countries. It's never level stuff. The US isn't perfect but its the best option towards a "rules based" order of the world.
  - tehjoker 3y ago
    Well (1) I'm a socialist so I just disagree. (2) Why do people forget the Snowden leaks? We have the most sophisticated and globally pervasive system of hacking and surveillance ever devised. (3) The world is asking for a "UN Based Order." A "rules based order" as described in US foreign policy journals just means "our rules, and we don't have to follow them."
    - randomopining 3y ago
      Where are the in-depth leaks from China and Russia? Are you naive enough to think that the CCP doesn't have a massive and complex surveillance apparatus? Do you expect the US to tie its hands behind its back when competing against the CCP? All this kind of talk is from a position of not understanding or not accepting the reality of what's at stake. These countries are autocratic and they want control of the world. The US with all its faults is the better path forward.
      - tehjoker 3y ago
        It's widely known that we're leagues ahead in cyber capability, just like the rest of (most of) our military technology. To pretend otherwise is sophomoric. I'm sorry, I just don't agree with what you are saying. This discounts the economic and imperial interventions the US has made around the world. By contrast, China has not done any of that and Russia didn't until very recently, but even the Ukraine situation is more defensible in a sense than running halfway around the world to fuck with Iraq for lulz.
einpoklum 3y ago
1. Good on them. 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). 3. I just wish the export profits are distributed more fairly, effectively and reasonably (which, right now, I somewhat doubt). 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: https://www.youtube.com/watch?v=n1TBAWlbXKI https://www.youtube.com/watch?v=n1TBAWlbXKI
skellington 3y ago
RIP Chile's lithium industry...
- sillystuff 3y ago
  More like RIP Chilean democracy, as the US stages yet another coup, and installs yet another brutal far-right dictatorship that tortures, murders and disappears its citizens. Chile still hasn't yet replaced the constitution drafted by the last US installed brutal far-right murderous dictatorship after the last time a US backed coup overthrew Chile's democracy. Many of the bodies of the disappeared have not yet been recovered. The mothers of the disappeared still gather to mourn their still missing children in neighboring Argentina where the US also overthrew their democracy and installed a brutal far-right murderous regime. The US hand in Central America was even more brutal-- even engaging in genocide. And, RIP the many who will lose their lives fighting the US oligarchy installed coup government. Sadly, realistically, the best case will be a repeat of what happened in Bolivia, where the US (Trump administration) staged a coup, against the most popular president in Bolivian history, and installed a brutal far-right government in an attempt to steal Bolivia's lithium. The US installed coup government fired live ammunition into protesters trying to regain their democracy and freedom. The Bolivians won their freedom back in only a few months, but there were many losses.
  - kingofthehill98 3y ago
    Anyone who doubts this should checkout what the Chicago Boys did during the military dictatorship that Chile went through last century.
AlexGood 3y ago
[dead]
- serial_dev 3y ago
  To a coup organized by the West and endless media coverage how Chile needs some democracy?
  - deleted 3y ago
    [deleted]
alphanullmeric 3y ago
Monopolies are bad unless the government is forcing one onto you.
NHQ 3y ago
Chile is the region they intend to scrape lithium from Mars... to rain down upon the Earth.
insane_dreamer 3y ago
lithium is the new oil, so it's unsurprising to see the same nationalization trend that we saw with oil (which was a good thing)
NoZZz 3y ago
With this and Porsche's e-fuel plant they seem to be going places

208 points by rib3ye 3y ago

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: 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. 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…

cmrdporcupine 3y ago
> Yea, the commies accidentally created famines I'd actually argue the stalinists created famines not by accident but at least partially by intent. Their economic modelling and planning were terrible, yes -- in part because of ideological blindness you mention. But the existence of the NEP for a short period of time in the 20s shows that at least some of the Bolsheviks were able to demonstrate more flexible thinking. But they were also legitimately terrible, damaged, malevolent people who were the products of a nasty civil war. Starving their perceived enemies and brutalizing whole populations to do so was part of their MO.
- williamcotton 3y ago
  Good points all around! The same general problem of recovering from a brutal civil war seems core to Maoists as well! Ideology and gunpowder make for a terrible brew.
  - cmrdporcupine 3y ago
    The first half of the 20th century was a cruel time and engineered cruel people, of all ideological stripes. 50 years of living with the consequences of WWI.
- muro 3y ago
  I would say they were also a cause, not just a product of a nasty civil war.
  - cmrdporcupine 3y ago
    Not the Tsarist monsters who sent waves of young men to be butchered in WWI?
    - muro 3y ago
      Every country in WWI did that, no? Anf while didn't say they were the only cause, they certainly didn't try to minimise casualties.
      - cmrdporcupine 3y ago
        My point is that the first act the Bolsheviks did was to end Russian involvement in WWI and end that slaughter. (At the cost of massive loss of territory and reprisal from western powers.) It ain't black and white.
        muro 3y ago
        That's a good point. I thought the Russian civil war was already happening at that time, so it enabled everyone in Russia to focus on that one alone. Is that incorrect?
        cmrdporcupine 3y ago
        Civil war happened a bit later, but I guess it's blurry because it was also mixed up with the foreign invasion / punishments that came out of the Soviet withdrawal from the war and Brest-Litovsk. The allies were enraged by the withdrawal from the war, but of course also extremely interested in destroying the new Bolshevik regime. So right away after 1918 they were thrown into a conflict setting. I'd have to defer to an actual historian here for the full details, but my understanding of the history is that the "whites" that the Bolsheviks fought in the civil war were funded and aided by foreign powers (Britain, etc.), and that that funding and intervention began the moment Brest-Litovsk was signed, but then later transitioned into the full civil war scenario. Of course it all depends on how you draw definitional lines around civil war vs revolution, etc.
- bitL 3y ago
  Stalinists were trying to create economies of scale by centralizing agriculture to large conglomerates but weren't smart enough to avoid supply disruption that together with dry years, optimistic communication/lies and foreign export led to massive famines throughout the whole USSR. One can see the same pattern in large corps where the front falls suddenly off.
  - cmrdporcupine 3y ago
    But it was also bound up with ideological and ethnic campaigns against e.g. Ukrainian nationalists and the Ukrainian peasantry generally. Stalin was a big fan of collective punishment, repopulation, depopulation, etc. Sociopath. Resistance of aspects of the peasantry to collectivization, etc. became an excuse for brutal policies, independent of any theoretical "socialist" policy. Remember Marx (and even Lenin) wrote nothing about e.g. agricultural policy or even what socialization of industry would look like in practice. So these people (Stalin and his apparatus) were making it up as they went along, and they were awful people. e.g. Stalin came to power against Trotsky and the Left Opposition by insisting on maintaining the NEP and taking a more gradual and pragmatic approach and then turned around, exterminated his opponents, and did the precisely the opposite and forced mass collectivization (leading to mass starvation.)
analog31 3y ago
Moreover, it seems to me that with the amount of oversight needed to prevent the mines from laying waste to their surroundings and abusing their workers, and the anticipated bail-out when it goes bankrupt, the government might as well just run it.
hackeraccount 3y ago
I wouldn't hold up Fannie and Freddie as a model for anything.
- williamcotton 3y ago
  Why not? They’ve created an insane amount of private wealth in the US and are profitable. FHA loans have caused more good than harm.
  - Kiro 3y ago
    For someone outside the US those names are only associated with the financial crisis. I don't even know what they are and honestly thought they were another Lehman brothers that didn't exist anymore, so your comment read like a joke.
    - mattmaroon 3y ago
      If it makes you feel better, most American home owners have a loan that originated with one of them and still don’t know any more about them than you do.
    - JauntTrooper 3y ago
      Fannie Mae (FNMA) and Freddie Mac (FHLMC) are companies that the US federal government set up and sponsors in order to support the mortgage industry and provide liquidity to banks and other financial institutions that provide mortgages to Americans. So if a bank offers a mortgage to a customer and the loan conforms with Fannie and Freddie's underwriting policies, Fannie and Freddie will buy it from them them. They then package some of those loans into a loan portfolio and sell it to fixed income investors. About 70% of US mortgages are supported by Fannie and Freddie.
      - williamcotton 3y ago
        Unfortunately reality isn’t the point of these online exchanges.
- 3y ago
mughinn 3y ago
The problem is that the State exists to abuse the rights of the people I don't understand how or why profits ending up on private hands is bad, you are a private hand and the State robs you all the time
- andybak 3y ago
  > The problem is that the State exists to abuse the rights of the people The state exists for a multiplicity of reasons - some of which are harmful and some of which are beneficial. And if the state doesn't exist then other actors will step in to and will also do a mixture of harm and good. Any attempt to handwave away the nuance just sounds silly.
  - mughinn 3y ago
    The existance of the State is an infringement on your rights, any good that comes out of it isn't really an argument. It's akin as saying that killing all poor people would eradicate poverty, so it is harmful in some ways but it has some benefits Other actors would also be States, we the people should fight against all States, not just the current one
    - fmajid 3y ago
      Because human rights are so well-protected in Afghanistan, Somalia or other such failed states. The alternative to a functioning state is not some techno-anarchist utopia, its warlordism and feudalism. Even the Taliban were seen as preferable to that (they got their initial political capital by rescuing boys kidnapped by warlords to be used as catamites).
      - malermeister 3y ago
        The techno-anarchist utopia is neo-feudalism. They just hope to be on top this time.
        mughinn 3y ago
trompetenaccoun 3y ago
It's about macroeconomics, it doesn't mean that you can not have the state run anything at all. Austrian economists are not anarchists. For example I can point to successful schemes in Saudi or China and still see that on the grand scheme of things private markets are a lot more efficient. You're pointing to the exception as a criticism of the rule. If they do it right this step makes a lot of sense for Chile. It doesn't negate the fact that socialist policies have economically ruined South America at large. Venezuela is the best example, it used to be the richest of them all not very long ago.
- alvarezbjm-hn 3y ago
  Not "socialist policies" Populist dictators have ruined everything.

TradingPlaces 3y ago

More details and background: https://seekingalpha.com/article/4595845-chilean-lithium-nationalization-albemarle-sqm https://seekingalpha.com/article/4595845-chilean-lithium-nat...

nordsieck 3y ago

> Future lithium contracts would only be issued as public-private partnerships with state control, he said. > 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. 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.

dmbche 3y ago
"SQM's contract is set to expire in 2030 and Albemarle's in 2043." Worth noting! badtake/This looks like the national electricity model in Quebec, where the public absorbs risk and the private part of the private-public partnership absorbs profits. Just the best!/badtake Edit: looks like this is an outdated take - please diregard
- nordsieck 3y ago
  Well, since these will mostly be foreign companies partnering with the government, I imagine that it'll be a little closer to the Chinese model, but maybe with a bit less IP theft.
- icegreentea2 3y ago
  What's the private part of the Quebec model?
  - dmbche 3y ago
    Hydro quebec is the national energy "company", which is nationalised, but they give contracts to other companies to run parts of their operations - this happenes through multiple deals by one of our past prime minister. At this point, Hydro-Quebec is only directly responsible for a portion of the hydro we create, while it has let natural gas, wind turbines and possibly more to private companies. Edit: refer to my other comments, this is a bad take, hydro is not privately owned It's hard to research even for a french speaker though - I think I might reasearch and write something on it just to clarify my own opinions

rapsey 3y ago

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.

kmfrk 3y ago
Sounds like what Indonesia is also doing: https://twitter.com/70sBachchan/status/1587125692294201347 https://twitter.com/70sBachchan/status/1587125692294201347.
- ochoseis 3y ago
  Here’s another guy talking about the same: https://youtu.be/BHFpGIwwh7M https://youtu.be/BHFpGIwwh7M
29athrowaway 3y ago
But they don't have the resources to build the infrastructure to extract it in a profitable way. So likely what will happen is that China will do it and pay below market rate for the lithium. I would not be surprised if the entire Boric fiasco is just Chinese infiltration.
- Cthulhu_ 3y ago
  That's one outcome, but they may find lots of companies and governments are willing to invest at more favorable conditions; the US is a logical candidate as well.
  - dandy23 3y ago
    Why would more companies/states be interested investing in Chile if Chile nationalizes and takes a bigger chunk of the profits than before?
    - 3y ago

cyclecount 3y ago

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pkaye 3y ago
I'm sure the EU will fight them in the WTO. https://www.reuters.com/markets/commodities/indonesia-plans-appeal-after-losing-wto-nickel-dispute-with-eu-2022-11-30/ https://www.reuters.com/markets/commodities/indonesia-plans-...

wunderland 3y ago

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.

alvarezbjm-hn 3y ago
They haven't tried pushing Maduro out of a chopper. Although they put a bounty on his head and that didn't work.
- pyth0 3y ago
  They did try to oust him with a failed coup [1] [1] https://en.wikipedia.org/wiki/Operation_Gideon_(2020) https://en.wikipedia.org/wiki/Operation_Gideon_(2020)

scythe 3y ago

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. 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 doubled from 2014–21: https://bibliotekanauki.pl/articles/2090756.pdf https://bibliotekanauki.pl/articles/2090756.pdf To some extent, nationalizing lithium is as much a publicity stunt as it is an economic policy.

dandy23 3y ago
And don't forget that those $900M are based on a very high lithium price. It has dropped since and very likely will drop more.
- npsomaratna 3y ago
  What if they move up the value chain though, rather than simply exporting the lithium?
  - aeyes 3y ago
    They are trying: https://www.reuters.com/business/autos-transportation/china-ev-maker-byd-build-290-mln-battery-component-plant-chile-2023-04-21/ https://www.reuters.com/business/autos-transportation/china-...
vlovich123 3y ago
You’re talking about the lithium itself. Chile specifically is taking steps to go upstream to capture more of the value as well so that 0.9B number would be severely undercounting.
- scythe 3y ago
  Chile would certainly benefit from having more battery manufacturing in its economy. They've recently joined the short list of countries where solar power is more than 10% of consumption — growing fast — and they still generate and consume much less total electricity than a typical developed country. This implies that they're going to end up with a very large solar fraction, and a need for stabilization. But you can't just make a battery out of lithium. You also need graphite and either nickel or iron phosphate. And you need some fine chemicals (the electrolyte). The good news is that Chile does produce some iron and phosphorus. But I don't think they currently produce much in the way of graphite or organic chemicals. I'm not sure, either, if they can process their iron and phosphorus ore into battery-grade iron phosphate. So it's not just "refining lithium". Lithium carbonate of commerce is already pretty pure. This isn't petroleum we're talking about. The danger is trying too hard to achieve autarky. The CPTPP (of which Chile is a member) at least in theory does have existing sources for those other components. But it seems like the Boric administration is skeptical of cooperation. Environmentalists are another potential barrier, since anything involving chemical engineering tends to get them riled up, justified or otherwise. By the way, I think you mean "downstream" when you say "upstream". Mines are generally the proverbial headwaters.

camillomiller 3y ago

This was news back at the end of April. Why is it emerging only now on here is a bit of a mystery.

tenpies 3y ago
Probably related to the constitutional referendum over the weekend, which the Left lost spectacularly[1]. I do find it funny that AP calls President Boric "centre left". --- [1] https://apnews.com/article/chile-constitution-kast-boric-plebiscite-referendum-4a3941e0541a9fee0c1b5976c0c6af40 https://apnews.com/article/chile-constitution-kast-boric-ple...
- peterfirefly 3y ago
  At least the Left in Chile are trying to operate within the law this time around, very much unlike Allende.
  - peterfirefly 3y ago
    Apparently there are lots of people who don't know there were two coups in Chile: first Allende's and then the counter "coup" (because Allende had already been legally deposed but refused to leave his post).

ACV001 3y ago

This is very good and every country should to the same with all their natural resources!

derelicta 3y ago

Someone is gonna get coup'd

r00fus 3y ago
The US is too busy dealing about Ukraine/Russia and worrying about Taiwan/China to do a damn thing about it. China (#2 world power) has no foreign bases and prefers to economically control the countries through loans (economic coup - WMF/WorldBank style) - nationalized could still work for them but not as good terms. Saying "coup" is like those extremist YouTubers who threaten defamation lawsuits when you leak their dirty deeds - all hat, no cattle. The Monroe Doctrine is defunct now.

Ligma123 3y ago

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. 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. 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.

kwere 3y ago
setting up a whole industrial value chain from mine to manufacturing & servicing is not guaranteed to succeed in any shape or form, "forcing it" has historically only been pet projects for the hegemons of the time, and a lot still failed, like Soviet computing industry and now (probably) the PRC chip manufacturing (sudsidized with at least like 120 billion$)

sproketboy 3y ago

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FpUser 3y ago

>"It poses a fresh challenge to electric vehicle (EV) manufacturers " Why does it pose a challenge?

tehjoker 3y ago

Excellent. Let's hope the US can't do what we did to Salvadore Allende.

randomopining 3y ago
If Chile aligns with us that would be great. You do know that if the CCP take defacto control there, they would control the system much more than you think the big bad Americans do. Look at the surveillance apparatus they help deploy in their "aligned" countries. It's never level stuff. The US isn't perfect but its the best option towards a "rules based" order of the world.
- tehjoker 3y ago
  Well (1) I'm a socialist so I just disagree. (2) Why do people forget the Snowden leaks? We have the most sophisticated and globally pervasive system of hacking and surveillance ever devised. (3) The world is asking for a "UN Based Order." A "rules based order" as described in US foreign policy journals just means "our rules, and we don't have to follow them."
  - randomopining 3y ago
    Where are the in-depth leaks from China and Russia? Are you naive enough to think that the CCP doesn't have a massive and complex surveillance apparatus? Do you expect the US to tie its hands behind its back when competing against the CCP? All this kind of talk is from a position of not understanding or not accepting the reality of what's at stake. These countries are autocratic and they want control of the world. The US with all its faults is the better path forward.
    - tehjoker 3y ago
      It's widely known that we're leagues ahead in cyber capability, just like the rest of (most of) our military technology. To pretend otherwise is sophomoric. I'm sorry, I just don't agree with what you are saying. This discounts the economic and imperial interventions the US has made around the world. By contrast, China has not done any of that and Russia didn't until very recently, but even the Ukraine situation is more defensible in a sense than running halfway around the world to fuck with Iraq for lulz.

einpoklum 3y ago

1. Good on them. 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). 3. I just wish the export profits are distributed more fairly, effectively and reasonably (which, right now, I somewhat doubt). 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: https://www.youtube.com/watch?v=n1TBAWlbXKI https://www.youtube.com/watch?v=n1TBAWlbXKI

skellington 3y ago

RIP Chile's lithium industry...

sillystuff 3y ago
More like RIP Chilean democracy, as the US stages yet another coup, and installs yet another brutal far-right dictatorship that tortures, murders and disappears its citizens. Chile still hasn't yet replaced the constitution drafted by the last US installed brutal far-right murderous dictatorship after the last time a US backed coup overthrew Chile's democracy. Many of the bodies of the disappeared have not yet been recovered. The mothers of the disappeared still gather to mourn their still missing children in neighboring Argentina where the US also overthrew their democracy and installed a brutal far-right murderous regime. The US hand in Central America was even more brutal-- even engaging in genocide. And, RIP the many who will lose their lives fighting the US oligarchy installed coup government. Sadly, realistically, the best case will be a repeat of what happened in Bolivia, where the US (Trump administration) staged a coup, against the most popular president in Bolivian history, and installed a brutal far-right government in an attempt to steal Bolivia's lithium. The US installed coup government fired live ammunition into protesters trying to regain their democracy and freedom. The Bolivians won their freedom back in only a few months, but there were many losses.
- kingofthehill98 3y ago
  Anyone who doubts this should checkout what the Chicago Boys did during the military dictatorship that Chile went through last century.

AlexGood 3y ago

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serial_dev 3y ago
To a coup organized by the West and endless media coverage how Chile needs some democracy?
- deleted 3y ago
  [deleted]

alphanullmeric 3y ago

Monopolies are bad unless the government is forcing one onto you.

NHQ 3y ago

Chile is the region they intend to scrape lithium from Mars... to rain down upon the Earth.

insane_dreamer 3y ago

lithium is the new oil, so it's unsurprising to see the same nationalization trend that we saw with oil (which was a good thing)

NoZZz 3y ago

With this and Porsche's e-fuel plant they seem to be going places