Chilean President Gabriel Boric's call last week for tighter state control of lithium is becoming the latest test of the resource nationalism espoused by Latin America's rising left, but which is proving difficult to implement in practice.
While the former student protest leader's proposal to give the government a majority stake in all future lithium projects faces an uncertain path in Congress, its very introduction has shaken one of the most lucrative corners of the mining industry.
The efforts of Mr Boric, 37, also highlight longstanding tensions between governments in the region over the desire to control coveted commodities and future profits on the one hand and the continuing need for private sector capital and technology on the other.
"In Chile, this is probably going to be the most important case," said Carlos Pascual, chief energy executive at IHS Markit. He was referring to other efforts in the region to tighten government control over rare earths. Rare earths are seen as key to a green future, he said, noting that Chile plays a huge role in the global metals market as the world's largest copper producer and second largest lithium producer.
"This is seen as an opportunity to secure direct revenue for the country, just as many countries decided to nationalize oil in another era," he added.
Last year, President Andres Manuel Lopez Obrador, Boric's fellow leftist, enacted a sweeping nationalization of lithium mines and later ordered the creation of a new state-owned lithium mining company, litomx, Although the country is still a long way from selling its first batch of the ultra-light metal.
Lithium is in high demand for rechargeable batteries in the global transition to green energy.
Lopez Obrador reveres the country's landmark 1938 oil nationalization, which he defends as a logical extension of his policy. Citing the abuses of past colonial rulers and modern corporate titans, he argued that only government could prevent exploitation and ensure the wide distribution of benefits.
Around the world, nationalizing the oil industry has proven to be an attractive means of profiting from valuable raw materials and promoting development, even though competitive commodity markets typically produce more output and innovation.
However, illustrating the challenge of starting from scratch, a Mexican official with knowledge of the government's mining plans played down the chances of the new state-owned lithium miner producing any time soon, instead trumpeting an alternative.
"litomx can move up the value chain by importing lithium," the official told Reuters.
Asked for comment, a spokesman for Mexico's Energy ministry stressed that litomx remained focused on finding and extracting lithium, although future imports could be considered "premature."
Unsurprisingly, mining companies are less than sanguine about the nationalistic tendencies of Mr Lopez Obrador and Mr Boric. He stressed that under his plan private miners would be able to partner with a yet-to-be-established state miner, but only as minority shareholders.
Armando Ortega, chairman of the executive committee of Baramin, Mexico's largest barite producer, said: "It is a brave bet to ask investors to prefer an uncertain marriage with a state-owned company and to take a minority stake, risking capital and technology, rather than flying alone." Barite is a mineral used in oil drilling.
centralization
Chile and its neighbors Bolivia and Argentina are believed to have more than half of the world's recoverable lithium. These salt flats typically use evaporation ponds to concentrate metals, though new technologies are also being developed.
Bolivia's ruling socialists also insist that the state should play a leading role in developing its vast but untapped reserves, even as it counts on help from partners such as Chinese battery giant CATL.
Peru, a mining powerhouse known for its copper, might have taken a similar approach to pushing lithium borate had former President Pedro Castillo not been ousted late last year.
Mr Castillo, a leftist, won a narrow victory in 2021 promising to nationalise ultra-light metals and other minerals such as copper, but later relented, leaving the promise unfulfilled.
Ivan Merino, Castillo's first energy and mining minister, said in an interview on Monday that Peru was watching a growing trend of resource nationalism.
"It's almost commonplace now," he said. "We will witness history being made, but we will not participate in it."
That leaves an exception to the trend, with Argentina becoming an increasingly likely Latin American destination for new lithium private capital.
"It's not because Argentina is doing what it needs to do, but because of the turmoil in our neighborhood and the surge in world demand," said Santiago Dondo, a former vice minister of mines.
In Argentina, the world's fourth-largest lithium producer, a number of strong lithium projects are close to coming on stream.
Dondo said four parties in outgoing leftist President Alberto Fernandez's main opposition coalition had recently voted for private companies to be the main driver of the sector ahead of elections later this year.
He noted that local control of the mining industry in three key provinces in the north-west of Argentina had helped prevent any nationalisation of lithium a few years ago, boosting investor sentiment.
But Dondo remains concerned that lithium batteries could be replaced by another battery technology.
"We don't know how many more years of opportunity we'll have," he said. "The changes in the energy transition have been accelerating."
