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Globaltradedata
WHAT IS NATIONALISATION?
A nationalization is an act of the central government of any country wherein the government plans to take 100% control of any firm, industry, or product to claim all the rights related to that specific item. Government plans to take this step when it doesn’t like the ongoing foreign ownership when it wants to give competition to the existing foreign players, or simply to take the power of a particular firm or an industry.
The basic agenda behind nationalization is that the state should get all the power of a particular firm with respect to all domains like production, distribution, sales, supply chain, etc. As per socialists, the people are treated fairly and in a better manner in a public company. the key reasons why government nationalizes industries are:
- Nationalization can be a part of a strategy to fight against another country.
- With the help of nationalization, the exploitation of workers comes to an end in the private sector.
- To generate capital and revenue.
- Helps in reducing competition.
- To guarantee ongoing services without any delay.
- Nationalization leads to efficient utilization of resources.
WHY IS CHILE PLANNING TO NATIONALISE ITS LITHIUM INDUSTRY?
The president of Chile, Gabriel Boric recently announced that the country is planning and all set to nationalize the lithium industry of Chile very soon. According to him, by doing so, the economy of the lithium industry would shoot up and hence, it will protect the environment to some extent. Chile is presently considered the second-largest producer of Lithium as per Global trade data and is used as a primary element in electric vehicles.
At present, the lithium industry is operated and functioned by the big industry giants, SQM and Albemarle. This ownership would be transferred very soon to a different company which would be owned by the state.
The basic reason for nationalizing the Lithium Industry of Chile by the president is to safeguard it and avoid unnecessary wastage. As lithium would come under the control of a state government, the full right and control would be of the government. This will ensure the delivery of the right and correct quantity to every buyer and trader.
The president of Chile has also added that the past contracts would not be terminated and would surely be completed but all the new contracts would be issued as per public company norms and public-private partnerships, with pure control of the state.
TOP LITHIUM IMPORTERS FROM CHILE
In the year 2021, Chile was the nation that exported Lithium worth USD 896 million according to Chile export data for the same time period, and became the world’s biggest lithium exporter. The major export partners of Chile in 2021 were:
- China (USD 390 million)
- South Korea (USD 251 million)
- Japan (USD 105 million)
- Belgium (USD 65.5 million)
- The United States (USD 42.9 million)
The Import Export Data of China has significant space for importing lithium as the nation is the biggest hub of electric vehicles and battery production. Followed by South Korea which is again a hub for EV production.
In January 2023 also, lithium exports from Chile amounted to USD 565 million with major export partners such as China, Korea, and Japan. The reason behind this export growth is the rise in exports to China, Belgium, and SA.
CONCLUSION
As the lithium industry of Chile is getting nationalized, the trade facility of the country would enhance in the future. This is because the whole industry will come under the control of the country’s government and a systematic way of trade would be followed. The exploitation of workers would come to an end, and they would be getting a fixed payout. This is a good step taken by the President of Chile in our opinion. Do let us know your thoughts in the comments below.
BONUS TIP
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