Human beings are intelligent animals who innovate their way out of shortages

See The Oldest Mistake in Economics: Chile nationalizes its lithium reserves, in another sign of Latin America’s left turn by Mary Anastasia O’Grady. Excerpt:

"“Human beings are intelligent animals who innovate their way out of shortages, real and imagined,” the Cato Institute’s Marian Tupy wrote in 2018 in reference to alarms set off by China’s dominance of rare-earth minerals. The national-security crisis predicted by New York Times columnist Paul Krugman and others hasn’t happened because the market has produced searches for new deposits and substitutions, Mr. Tupy explained.

But let’s suppose that lithium is the silver bullet for humanity that Mr. Boric describes. A second problem is the unlikely assumption that state ownership is the best way to capitalize on it.

There are currently two companies mining lithium in Chile: Sociedad Química y Minera de Chile (SQM) and Charlotte, N.C.-based Albemarle Corp. (ALB). Mr. Boric has said that their concessions—expiring in 2030 and 2043, respectively—will remain in place. But he also said that he hopes the companies will work with the state before those expiration dates, which sounds like they’ll be pressured to do so.

When those concessions expire, and for any new entrants in lithium, only minority ownership by private investors will be permitted. The state will become the 51% owner of the business. The day after the Boric speech, SQM shares lost nearly 20% while ALB was off almost 10%.

The government says that minority partners will put up capital and know-how to explore and exploit Chile’s lithium reserves and the Chilean state will provide “financing.” But the Associated Press reported on April 21 that “it remains unclear whether the government would contribute capital in direct proportion to its ownership stake.”"