President Boric proposes plan for Chilean lithium to benefit the Chilean people

Chile has been on an interesting and positive arc in recent years. Left-wing politician Gabriel Boric won the presidency there, representing the first big shift to the left since the fascist Pinochet took over in a US-backed coup in 1973. They’re currently working on a number of reforms, and are trying to negotiate a new constitution, to replace the one from the Pinochet era. One big change that was just announced was a plan to gradually nationalize Chile’s lithium industry. They intend to honor existing contracts, but to have more direct government involvement in new ones, with the intent of bringing more of the profits to the Chilean people, and eventually producing lithium-based products in Chile, rather than only selling raw lithium. From the Associated Press:

Boric, who spoke Thursday on a national media network, said the state will participate in the entire lithium production cycle in a “public-private collaboration” that the government will control.

“Any private company, whether foreign or local, that wants to exploit lithium in Chile must partner with the state,” he said.

Chile has the world’s third largest lithium reserves, at 9.6 million tons, behind Bolivia with 21 million and Argentina with 19.3 million, according to the U.S. Geological Survey. But Chile was the world’s second largest producer last year with an estimated 39,000 metric tons, after Australia, with 61,000 tons.

Boric wants to create a National Lithium Company to partner with private companies, but he conceded that likely will not happen quickly because it would require support from an absolute majority in both houses of Congress, which is fragmented among a variety of parties.

In the meantime, he said, the state National Copper Corporation will sign agreements with private parties for lithium extraction.

Currently, there are two companies that mine lithium in Chile: the U.S. company Albemarle and Chile’s Chemical and Mining Society (Soquimich), which has been controlled for three decades by Julio Ponce, whose father-in-law was the late dictator Augusto Pinochet. Boric said Ponce’s contracts will be respected.

Boric said that in addition to being involved in mining, the government will promote the development of lithium products with added value, with the goal of becoming the world’s leading lithium producer.

The minister of mining, Marcela Hernando, recently told Congress that the government cannot advance alone in the exploitation of lithium because “technology and knowledge are in private industry.”

A public-private partnership is needed, Hernando said, though he added that “the state is the owner of lithium,” which is an “uncompromisable” position of the government.

This seems like a pretty generous arrangement, to me. As the AP mentioned, the existing situation gives the profits from Chile’s lithium to a US company, and the son-in-law of a murderous, fascist dictator installed by the US. I’m underscoring that, because there’s a long history of colonial powers – especially the US – violently installing governments that will give them favorable deals on natural resources. If a nation manages to re-assert sovereignty and self-governance, they’re then faced with the existence of these exploitative deals that might as well be designed to keep that nation in poverty. If they say, rightly, that the existing contracts lack validity because of how they came to be, well, that’s an excuse for the US to come in with assassins, death squads, and coups.

To me, it appears that Boric is trying to thread that needle by carrying the burden of enriching a dictator’s relative and a corporation from North Carolina for many years to come. This plan lays out a slow path to a better arrangement that may avoid US interference, by indulging Ponce and Albemarle far more than they deserve. Even so, I think it’s pretty much certain that both will view this as a plan to steal from them, and will do everything they can to block this policy from going through, and to replace Boric with some flavor of neoliberal.

Chile’s congress still needs to approve this, and to me that says it’s far too soon to celebrate. Some of you may recall that I posted about the effort to draft a new constitution, last year. The first draft was shot down, and so they’re trying again this year, with a more conservative rewrite. Boric campaigned on ending the era of neoliberalism that was imposed by Pinochet and the United States, but unfortunately winning the presidency doesn’t mean he has the power to do that. It is good that one person can’t just force through whatever they want, but placing limits on an individual’s political power can only do so much if there are no limits on an individual’s economic power. I think the situation in Chile is nowhere near as dire as the United States, but it’s clear that the capitalist class still has power to wield, to undermine efforts to move Chile to the left, even discounting the threat of less legal interference.

I’m worried, obviously, but I absolutely think this is a good thing for Boric to be attempting, and I hope he keeps trying even if this attempt is blocked. Learning the history of this sort of thing can, quite naturally, lead one to be pessimistic about how a situation like this will play out. It’s good to be on the alert about this sort of thing, and reasonable to worry, but never forget that our whole project, on the left, is all about breaking from historical patterns. Victory is by no means guaranteed. The losses of the past and the horrors of the present make it very clear that we are fighting against the odds. In our current divided state, the aristocracy has far, far more power than the working class, and a lot of that time, that does mean that we will lose. We should keep fighting anyway, because the alternative is to accept misery and servitude for most of us, followed shortly by likely destruction for all of us.

“I do not fight fascists because I will win. I fight fascists because they are fascists.”
Chris Hedges


  1. sonofrojblake says

    Nice lithium mine you’ve got here. Be a shame if it burned down.

    If i was a chilean politician I’d be shit-scared of even slightly pissing off the US over this. They have a LONG coast for parking aircraft carriers off of.

  2. Bruce says

    Right wingers often say the government should be run more like a business.
    Here, Boric is doing what any corporation would do, and I bet the right opposes it.
    That shows their opposition is not principled. They just wanted a sweetheart deal that benefited themselves more than the nation that owns the resources.

  3. says

    Right wingers often say the government should be run more like a business.

    Where I come from, that’s called corruption.

    In ECON 101, we’re taught the difference between “businesses,” which maximize profit, and “households,” which maximize utility. And while there’s lots of overlap between those two behaviors, one HUGE and VERY IMPORTANT difference is that households don’t get to lay off their most recent, least experienced and least productive members. So no, governments don’t need to be run like businesses, they need to be run like households.

  4. says

    @Raging Bee – I think you’re thinking about the wrong kind of “like a business”. We’re talking more about the way a megacorp like Walmart actively works to avoid competition, and uses extensive internal and central planning to ensure a kind of predictability and efficiency that “market forces” simply cannot provide.

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