Understanding Cartel Viability: Implications for a Latin American Lithium Suppliers Agreement

David R. Mares
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David R. Mares: Department of Political Science, University of California, San Diego, CA 92093, USA

Energies, 2022, vol. 15, issue 15, 1-26

Abstract: The energy transition requires significant volumes of minerals of which the Global South holds large reserves. This context revives hopes and fears that producing countries in the Global South might hold sufficient market power to demand above market prices, technology transfers and even migration of productive processes to their countries. Our research question is what determines the effectiveness of states’ collusion on natural resource exploitation and how does that affect the probability of Latin American collusion regarding lithium. The study utilizes Social Science methods for developing frameworks of analysis and comparative case studies. Following an overview of what is required for effective cartels, the study focuses on characteristics of the six primary lithium producers and potential producers in Latin America: Chile, Argentina, Bolivia, Brazil, Mexico, and Peru. Theory and empirical evidence indicate that Latin American lithium producers should be very cautious in assessing their bargaining power vis a vis the market. More focus should be put on how best to utilize market determined profits to support sustainable national development. The conclusion highlights limitations of Latin American countries’ capacities and suggests future lines of research regarding potential commodity cartels for resources essential to the energy transition.

Keywords: lithium; cartels; Latin America; EV; Australia; China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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