In a surprising though not unprecedented move, Chile announced plans to nationalize its lithium industry, following similar efforts in resource nationalism among major producers of “battery metals.” Although implementation of the reforms is expected to be gradual and keep existing contracts intact, the decision stands to influence the political will and feasibility for other lithium producers to follow suit. In seeking to indigenize and retain a greater portion of the value chain in their mining sector, the policies instituted by Chile and other lithium producers have significant implications for the global energy market as demand for electric vehicles and renewable infrastructure soars.
At present, Chile possesses the world’s largest lithium reserves and is the 2nd largest producer, behind Australia. In its return to resource nationalism, Chile seeks to secure its domestic supply and maximize revenue generation from this strategic resource, positioning itself as a leading player in the global battery metals market. Santiago’s move toward greater state control of critical minerals precedes a similar phased plan for copper nationalization dating back to the 1950s and ending with the military coup in 1973 that removed the left-wing government of then-President Salvador Allende.