Chile’s White Gold Rush

Welcome back to World Brief, where Chile nationalizes its lithium industry, Britain reshuffles its cabinet, and Russia strikes the wrong city.

Chile’s left-wing government is moving to exert more state control over one of the country’s most valuable natural resources. Chilean President Gabriel Boric announced on Thursday that he will nationalize the country’s lithium industry to boost the economy and protect biodiversity. Chile is the second-largest producer in the world of the lucrative metal, also known as white gold, which is critical for producing the batteries used in electric vehicles and other clean energy technologies. According to the World Bank, lithium demand is expected to explode in the coming decades. Economists predict that production must increase by more than 450 percent by 2050 to accommodate skyrocketing need.

Under the plan, the government will negotiate with the two lithium-mining companies in the country, SQM and the U.S.-based Albemarle, for a larger stake in their current contracts; these negotiations, as well as any new contracts, will be overseen by the state-owned copper producer Codelco, which has also been tasked with creating a framework for establishing a new state-owned lithium company in the future. Boric must still seek approval from Chile’s National Congress, where he lacks a majority, in the second half of this year to solidify the move—meaning the plan could undergo significant changes before all is said and done.

Boric argued that the country’s lithium reserves represent “an opportunity for economic development that will likely not be repeated in the short term” and that nationalizing the industry will enable the country to build “a Chile that distributes wealth we all generate in a more just way.”

“This is the best chance we have at transitioning to a sustainable and developed economy,” Boric said. “We can’t afford to waste it.”

The rest of the world is certainly hungry for Latin America’s lithium—some 60 percent of the world’s reserves of the metal can be found in the so-called lithium triangle, a region that encompasses Chile, Argentina, and Bolivia. Chinese Belt and Road Initiative (BRI) investments in lithium and copper have surged in Latin America over the last few years, with Chile joining the BRI in 2018. The European Union secured lithium and copper trade deals with Chile in December 2022, and German Chancellor Olaf Scholz visited Chile and Argentina in January to strengthen lithium ties so Berlin becomes less reliant on Beijing. To solidify Latin American control over the resource, Mexico and Bolivia both proposed the creation of a lithium OPEC, with Chile, Argentina, and Peru as fellow members. Mexico also nationalized its own lithium deposits last year.

Whether Boric’s nationalization plan will actually benefit Chile the way he envisions is yet to be seen. Some analysts are skeptical, saying nationalization is difficult to implement and could freeze new production players from entering Chile. “I think it could send a chill through foreign direct investment into the country in the coming years,” Chris Berry, president of House Mountain Partners, an independent metals analyst, told Foreign Policy.

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Cabinet controversy. Britain’s Conservatives are facing another cabinet reshuffle. Deputy Prime Minister Dominic Raab resigned on Friday after an independent investigation found he had bullied other government officials. Cabinet office minister Oliver Dowden will replace him.

This is far from Prime Minister Rishi Sunak’s first controversy. Senior Minister Gavin Williamson left in November 2022 over bullying allegations, and party chair Nadhim Zahawi was fired in January after evidence indicated he’d broken ministerial code. Sunak has desperately tried to differentiate his leadership from the flawed reigns of former Prime Ministers Liz Truss and Boris Johnson. Specifically, he’s pushed for transparency and anti-corruption practices despite growing party dissension. But Britain’s energy and economic crises have put Sunak on the defensive, and it looks to be a battle he hasn’t figured out how to win yet.

Wrong target. On Thursday evening, a Russian warplane accidentally targeted the city of Belgorod—a Russian town near Ukraine but not quite over the border. The regional governor said three people were injured. Although the type of weapon deployed is unknown, Russian state media reported that an Su-34 fighter jet was responsible.

Moscow recently secured a deal with Tehran to sell Su-34 planes in exchange for hundreds of Iranian drones. Although the weapons agreement could significantly benefit Russia’s war efforts in Ukraine, it could upset the Middle East’s balance of power, Grant Rumley argued. The Kremlin now relies more heavily on Iran than other trading partners, such as Egypt, which had canceled its order for Russian Su-34s after the West imposed sanctions on Moscow.

Comoros’s diplomatic spat. What goes around comes around. Comoros announced on Friday that it would not accept refugees from the French island of Mayotte after Mayotte officials vowed to remove migrants who arrived illegally—including many from Comoros—from its slums. Mayotte’s move, dubbed Operation Wuambushu or “Operation Take Back,” was approved by French President Emmanuel Macron in February. The French island is the poorest region in France, with almost half of its population living below the poverty line. Comoros was once also a French colony but gained its independence in 1975.

Which international organization on Monday vowed to take a tougher stance against China’s threats to Taiwan, North Korea’s tests of long-range missiles, and Russia’s war in Ukraine?

A. G-7
B. African Union
C. Association of Southeast Asian Nations
D. NATO

Editors of Australia’s Macquarie Dictionary have a few new trending words to consider when putting together 2023’s edition. Some of the finalists include gendy nooch, or gender neutral; cozzie livs, or cost of living; and (my personal favorite) murder noodle, or venomous snake. Because that seems fitting for the roughly 100 lethal slippery serpents living in Australia.

A. G-7

The group may crack down on North Korean state-sponsored hackers, who, as FP’s Robbie Gramer and Rishi Iyengar report, have worked to collect information pertinent to the country’s nuclear weapons program.

To take the rest of FP’s weekly international news quiz, click here or sign up to be alerted when a new one is published.