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The Chilean government is under the delusion that mining firms will supply expertise and most of the capital in exchange for a minority stake under a government
by sclarisse 3y ago
The Chilean government is under the delusion that mining firms will supply expertise and most of the capital in exchange for a minority stake under a government that’s already demonstrated its interest in nationalization. This is a terrible move for them, which is why Australian lithium miners saw their shares jump on the announcement.
Raising the royalties on the reserves, on the other hand, is something that could have actually worked.
- williamcotton 3y agoExpertise and foreign capital? For pulling lithium out of the ground? Sure, don’t nationalize your semi-conductor industry, but we’re talking about primitive mineral extraction for a very abundant and very in-demand commodity, and without the need for much exploration. You know mining is like printing money but just darker and dustier, right? And I very much mean printing money. See: Dutch disease. A lack of a regulated economy and a free-for—all of resource extraction can lead to massive hangovers. This is more in the ballpark of the machinations of the Federal Reserve than anything else. The problems with Venezuela are not the problems with Norway. Norwegians are rich and can afford the time and energy to work within the practicalities of a mixed economy. Venezuelans are poor and seem more swayed by hope on big bets. It takes ample patience to throw out ideology and tease things apart for what they actually are. I don’t fault people in substandard conditions for being swayed by ideology, but for the rest of us can we be a bit more pragmatic?