Chilean President Gabriel Boric’s April announcement of his plan to nationalize the country’s lithium industry to boost the Latin American nation’s industrial base and protect the environment may have prompted observers to declare his action a “shock move,” but as ARPN outlined in our last post, the “shock seems to result from global observers who are still learning to appreciate the importance of parts of the Periodic Table more critical to economic growth than ever before.” 

To those dialed into the issue, Boric’s move was hardly shocking. For one, he had made his plans known before he even assumed office. Furthermore, Boric’s announcement ties into an overall trend of countries resorting to resource nationalism, a trend which has certainly been noticeable in Latin America, an area with a historic penchant for nationalist policies, but also in other parts of the world.

Globally, recent steps taken by governments to nationalize their mineral resources have involved

• Myanmar, where the ethnic minority Wa militia has announced the suspension of work at mines in areas it controls beginning in August – a move that has led to a surge in tin prices with the Wa-controlled region estimated to account for over 70% of the country’s tin production;
• Indonesia, where the government has enacted an export ban on nickel and was exploring a ban on tin exports, with a scheduled bauxite export ban scheduled to take effect in June of this year, and more export bans for other materials to be announced in the coming years;
• Zimbabwe, where the government imposed a ban on unprocessed lithium in December of 2022, reportedly to prevent artisanal mining projects from taking the minerals across borders.

And then of course, as followers of ARPN well know, there is China, a country with traditionally tight state control over its resource sector. Beijing has been tightening its reins on its critical mineral supply chains, specifically for the country’s lithium battery supply chain, and has established a new state-owned group to serve as a “consolidated hub for the country’s iron ore trade,” with the mandate for “China Mineral Resources Group” covering mining, ore processing and trading.  As ARPN recently discussed, Beijing is currently considering prohibiting exports of certain rare-earth magnet technology, bringing back the specter of trade weaponization as tensions between China and the West soar.

But even in the Western world, government involvement in the critical minerals sector is on the rise.

While modern Western democracies are typically hesitant to embrace more state intervention in the critical minerals sector, many believe that in order to succeed, the United States and its allies need to learn “how to stomach more state intervention [themselves].” 

As Nabeel Mancheri, Secretary General of the Belgium-based Rare Earth Industry Association recently stated, “The EU is still reluctant to have state-oriented investment in the mining sector, but in certain cases, we have to do it.”

In the U.S., calls for a more robust industrial policy have also gotten louder – a recent piece in National Defense Magazine is a case in point – and recently passed legislation like the CHIPS and Science Act as well as the Inflation Reduction Act exemplify a more active government role in this sector as stakeholders increasingly acknowledge the importance of critical minerals to their nation’s economic wellbeing and national security.

As the Western world continues its quest to decouple from China, we can expect to see more active government involvement in the critical minerals sector.

For nations to prosper in this brave new world, the challenge will be to balance domestic and global policy approaches and public and private sector involvement with economic and security concerns to reflect today’s political and geopolitical realities.