FILE PHOTO: Chilean President Gabriel Boric looks on during his official visit to Mexico, at the National Palace, in Mexico City, Mexico, November 23, 2022. REUTERS/Henry Romero
By Matthew Chye
(Reuters) – Chile’s President Gabriel Boric announced on Thursday he would nationalise the country’s vast lithium industry to boost the economy and protect the environment.
The shock announcement is the latest in a trend as countries look to assert greater control over key resources amid intensifying competition for materials that are crucial to the energy transition.
Recent moves by governments globally to take more control of their natural resources:
* Home to the world’s largest lithium reserves, Chile said it will over time transfer control of its vast lithium operations from industry giants SQM and Albemarle (NYSE:ALB) to a separate state-owned company.
Chile is the world’s second largest producer of lithium, a key component in batteries used in electric vehicles.
Last July, Chile’s finance minister introduced a tax reform bill that increases copper mining royalties on companies that produce more than 50,000 tonnes a year and raises taxes on high-income earners, increasing state participation in mining income.
In January, a Chilean congressional committee approved the mining royalty bill, putting it a step closer to final approval, despite having drawn strong criticism from industry.
* In April, Myanmar’s ethnic minority Wa militia said it will suspend all work at mines in areas it controls from August, a move that triggered a surge in the price of tin, a material used in electronics and semiconductors.
Myanmar accounted for 77% of China’s tin ore imports last year, Chinese customs data showed. The Wa-controlled region is estimated to have accounted for over 70% of Myanmar’s tin production in 2022, according to the International Tin Association.
* A resource powerhouse, Indonesia is tightening controls over various materials in a push to develop local downstream operations and extract greater value.
Once one of the world’s biggest exporters of nickel, in June 2020 Indonesia banned exports of the metal’s ore while it sought to develop a full nickel supply chain, starting from extraction, processing into metals and chemicals used in batteries, all the way to building electric vehicles.
Last October, President Joko Widodo said Indonesia was exploring a possible ban on tin exports, and calculations about its potential impact had begun, after the world’s top tin exporter had already moved to halt shipments of a number of other metals in order to develop more processing at home.
In December, Widodo confirmed an export ban for bauxite starting in June 2023 as scheduled, to encourage domestic processing of a material used as the main ore source of aluminium.
More export bans will also be announced in the coming years in order to develop resource processing industry onshore, he said, speaking at an economic forum.
* In February, Mexican President Andres Manuel Lopez Obrador signed a decree handing over responsibility for lithium reserves to the energy ministry, after nationalizing lithium deposits in April 2022.
* In December 2022, Zimbabwe imposed a ban on the export of unprocessed lithium, in a bid to stop artisanal miners who the government says are digging up and taking the mineral across borders.