Mexico Nationalizes Lithium Industry (peoplesdispatch.org) 105
An anonymous reader quotes a report from Peoples Dispatch: Mexico has officially nationalized its lithium industry. On April 21, the bill, proposed by President Andres Manuel Lopez Obrador (AMLO), that modified the mining law to give the state the exclusive right to explore, exploit and use the valuable metal entered into force. According to the law, published in the Official Gazette of the Federation, the executive or the president now has 90 days to create a decentralized state company that will deal with all lithium-related matters. [...] The new mining law recognizes lithium as a heritage of the nation, and reserves it for the benefit of the people of Mexico. It elevates lithium to the category of "strategic mineral," and prohibits granting concessions, licenses, contracts, permits, assignments or authorizations for its exploitation to private corporations.
The president emphasized that lithium is a strategic element for the development of the nation, and its effective exploitation can contribute to economic growth. He said that his administration would work to develop necessary technology to take the best advantage of their lithium, ensuring that it does not harm the health of the population, the environment, or the rights of Indigenous people. He also took the opportunity to reiterate that his administration would review all lithium contracts. He requested that the shareholders and managers of the companies and corporations begin to establish a dialogue with their legal representatives. There is only one lithium mine in Mexico, operated by Chinese firm Ganfeng Lithium, which is slated to produce 35,000 tons of the metal per year starting in 2023. In the coming days, it will be discussed if that will be taken over by the government.
Meanwhile, the right-wing opposition criticized nationalization of lithium. Some legislators from the opposition National Action Party (PAN) and Institutional Revolutionary Party (PRI), who voted against the reform, said that it would severely affect the development in the mining of the metal, arguing that the Mexican government has no experience in mining lithium. Others criticized that it violated the United States-Mexico-Canada Agreement and would bring trade tensions. Nevertheless, the people of Mexico have expressed their approval of the president and his policies. A number of social organizations and trade unions have praised the president and the ruling center-left MORENA party, recalling that the nationalization of lithium in Bolivia during former president Evo Morales' rule helped the country achieve high levels of economic and social growth. "Lithium is considered an important resource due to its importance for the development of batteries used for electric cars," notes the report. "According to data from the US Geological Survey, Mexico has 1.7 million tons of lithium mining reserves."
The president emphasized that lithium is a strategic element for the development of the nation, and its effective exploitation can contribute to economic growth. He said that his administration would work to develop necessary technology to take the best advantage of their lithium, ensuring that it does not harm the health of the population, the environment, or the rights of Indigenous people. He also took the opportunity to reiterate that his administration would review all lithium contracts. He requested that the shareholders and managers of the companies and corporations begin to establish a dialogue with their legal representatives. There is only one lithium mine in Mexico, operated by Chinese firm Ganfeng Lithium, which is slated to produce 35,000 tons of the metal per year starting in 2023. In the coming days, it will be discussed if that will be taken over by the government.
Meanwhile, the right-wing opposition criticized nationalization of lithium. Some legislators from the opposition National Action Party (PAN) and Institutional Revolutionary Party (PRI), who voted against the reform, said that it would severely affect the development in the mining of the metal, arguing that the Mexican government has no experience in mining lithium. Others criticized that it violated the United States-Mexico-Canada Agreement and would bring trade tensions. Nevertheless, the people of Mexico have expressed their approval of the president and his policies. A number of social organizations and trade unions have praised the president and the ruling center-left MORENA party, recalling that the nationalization of lithium in Bolivia during former president Evo Morales' rule helped the country achieve high levels of economic and social growth. "Lithium is considered an important resource due to its importance for the development of batteries used for electric cars," notes the report. "According to data from the US Geological Survey, Mexico has 1.7 million tons of lithium mining reserves."
Direct money injection in the goverment (Score:2)
This will make the mexican goverment less dependent on the population, and that generally don't end very well.
Re:Direct money injection in the goverment (Score:4, Insightful)
Nationalization of an industry is only a temporary money injection, since the government is very rarely capable of ensuring that it *continues* to make money (and Mexico's record on this matter does not inspire optimism--they've tried nationalization before). Very quickly, the money runs out.
Re:Direct money injection in the goverment (Score:4, Interesting)
(Come to think of it I can't even imagine how much richer they are getting right now with the high oil prices.)
Of course such resounding success is not generally representative of the Middle East, Africa, or Latin America...
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Yes, Sovreign Wealth Funds are very cool and I hope Mexico does something similar to Norway in that regard. Especially in the fact that they have two seperate funds, one that solely invest in international businesses and one that seems more domestic focussed.
America should also have one, every country should. The resources of the land like oil and minerals belong to it's citizens just as much as the people who extract it.
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Give wealth back to the people? That’s something Jesus would do.
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Give wealth back to the people? That’s something Jesus would do.
Are you sure?
"The poor you will always have with you." -- Jesus Christ
Re: Direct money injection in the goverment (Score:2)
He knows what we are like
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Y
America should also have one, every country should. The resources of the land like oil and minerals belong to it's citizens just as much as the people who extract it.
You'd think that's what the natural resources leases would do. If you want to extract resources on federal land, you have to pay a fee to do it. Whether that fee is fair and reasonable, well, I don't know. It should be set at about the same level as if I wanted to buy oil rights from a farmer who owns a field.
We don't put it in a trust fund because Washington spends like drunken sailors. In fact, DC makes drunken sailors look like spendthrifts. So we spend every dime we take in on leases, plus a few dollars
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Well, no... oh, sorry, that's only drunken sailor spendthrifts on the DoD. Everyone else gets as little as possible..
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Norway's oil industry is dominated by Equinor [wikipedia.org], which is a public stock company.
The government of Norway owns 67% of the shares, with the remainder publicly traded.
Equinor is run as a normal corporation by profit-seeking capitalists, and the Norwegian government keeps out of the management.
That is not at all what Mexico is doing. Mexico has a long history of mismanaging its oil industry. Nationalization of lithium mining will lead to yet more lemon socialism [wikipedia.org].
AMLO will be in office for three more years and
Re:Direct money injection in the goverment (Score:5, Insightful)
So Norway popped unto the earth from another dimension bursting with wealth?
Or maybe investing your countries natural resource revenues into strong societal programs, education and workers rights end up making a wealthy country?
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Norway was a prosperous country before the North Sea oilfields were developed.
Plentiful natural resources usually result in lower prosperity: Resource curse [wikipedia.org].
Norway is one of a few countries to avoid the curse. America is another.
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That just means they have been able to stay as wealthy and grow in wealth while still having and growing these broad social institutions.
A trend the resource curse is not likely to last hold fast, not in the way the 21st century economy is shaping up.
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How do you think they got rich?
With a small load of a million dollars like Trump perhaps?
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Small load. *GIGGITY*
I meant loan of course :-D
Re: Direct money injection in the goverment (Score:1)
Norway still has a massive tax problem, the $250k/resident doesnâ(TM)t go very far, you get to spend it once, then what?
Re: Direct money injection in the goverment (Score:5, Informative)
Massive tax problem?
From Wikipedia:
"Ordinary income (alminnelig inntekt), which consists of all taxable income (wages, pensions, business income, taxable share income and other income) minus deductions (losses, debt interest, etc.), is taxed at a flat rate of 23% in 2018. Residents of northern Troms and Finnmark have a lower tax rate, at 19.5%."
Doesn't sound like a massive problem to me. Remember, for that 23% (MINUS deductions!) they get a huge amount of social services. Compare their tax rates and services versus say the U.S. An American making $86,376 or more paid at least 24% in taxes in 2021-2022, and no free healthcare.
Re: Direct money injection in the goverment (Score:5, Insightful)
Notice how that part is conviently left out whenever the topic of how much tax people in the Nordics pay. Yes, the middle and lower class pay more out in taxes but they get back strong public services, i doubt many citizens there would trade those out for that income back.
Indeed it seems that is a formula we should seek to emulate in America, broaden the tax base but use that to fund long term universal programs. Healthcare, childcare, education especially are all things that are better done collectively, they earn back the money invested in the economic output.
Any good capitalist should understand this.
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The problem with taking the Norwegian model and applying it to the US is not only a matter of scale but demographics and local traditions/cultural values. Norway is a country w/ the total population that is less then the population of the Dallas metropolitan area. Its very homogeneous and shares a strong cultural heritage. This doesnt apply to not only the US as a whole, not only various states, but metro areas in those states. The Dallas metro area is quite a bit different then Miami metro or NYC or Ch
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Economically, per capita the US and Norway are pretty close and America is still the economic powerhouse. The money scales, the admin scales since most things get actually done at the state and local level. Make things actually universal and you don't have to scale enforcement nearly as much. We do these things already.
Culturally I really have never heard a compelling case as to why the culture or homogenity matters when it comes to administering these programs. Whats the cultural issue with changing ho
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It's even worse than that. Say you're a programmer making 100k a year in Schaumburg Illinois:
Right off the top, you're only getting paid 85k, because you pay 7.5% social security, and your employer pays the same amount.
Of that 85k, you get a 24k personal deduction. The rest is subject to taxation. Of the 61k remaining, you'll pay about 6200 in federal taxes, and 3000 in state taxes, for an additional wallet lightening of about $9k.
This brings you down to 52k/year. You'll probably spend about $500/
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But in Europe, you have a VAT tax rate of over 20% when you try to spend your money, making your effective tax rate closer to 50%, whereas in the US it's a sales tax of 10% or less. The VAT hits poor people much harder than your hypothetical $100k / year individual and getting to 100k / year is much harder because the same job pays much less in Europe. I would be earning maybe 50-70% as much as I do now if I moved to Switzerland for example, which is not at all a low-cost-of-living country.
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The VAT hits poor people much harder than your hypothetical $100k
That is why food only has 7%, is likely dropped to 5% VAT.
year is much harder because the same job pays much less in Europe.
In general speaking that is wrong. Especially for low income jobs.
I would be earning maybe 50-70% as much as I do now if I moved to Switzerland for example, which is not at all a low-cost-of-living country.
That is complete nonsense. Switzerland pays nearly 2x the wages than the rest of Europe and has the lowest taxes.
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That is why food only has 7%, is likely dropped to 5% VAT.
Grocery is tax free in my state. Only 13 out of 50 states in the US tax groceries and the highest is 7%.
Switzerland pays nearly 2x the wages than the rest of Europe and has the lowest taxes.
...and the least benefits.
They're probably the most US-like country in Europe, but they still pay less than the US for high income jobs like programming (which is the example GP used), and their cost of living gets San Francisco a good run for its (your) money.
Re: Direct money injection in the goverment (Score:1)
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..and the least benefits.
Nope they are the same or higher.
ut they still pay less than the US for high income jobs like programming (which is the example GP used)
No they don't. High paid programming jobs in the US basically only exist in Silicon Valley. In Europe there is no absurd high payment for absurd high rent areas.
Bottom line a programmer earns more in Europe - any place, you pick it - than in the US.
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I make a bit over $100k in the US, the effective tax rate is ~18%. The effective tax rate you're still excluding a 20-25% VAT and 35-50% fuel and other 'sin' taxes.
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Right off the top, you're only getting paid 85k, because you pay 7.5% social security, and your employer pays the same amount.
That would be 92.5k
Americans are not really much better off, and don't pay lower taxes than their European counterparts when the cost of healthcare is factored in.
Actually you have to factor that out and not in. E.g. in Scandinavian countries, helthcare is indeed covered by taxes. In France, Germany and other: by health insurance.
And an insurance is by definition not a tax. Regardin
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Right off the top, you're only getting paid 85k, because you pay 7.5% social security, and your employer pays the same amount.
That would be 92.5k
Out of the $100k the company is willing to spend to employ you, after accounting for other overhead, $7.5k is paid by the employer as "their" half of SS, and another $7.5k comes out of your paycheck as "your" half. That's $15k total, leaving $85k. You only see the second part but it all affects the amount of money you take home.
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That's $15k total, leaving $85k.
No it is not.
As you explained it perfectly well: the other half is paid by the company. You get 92.5k on your bank account. Not 85k.
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Define "tax problem", Norways national debt in relation to GDP has actually been pretty flat.
Mexico nationalized their oil industry in 1930s (Score:2)
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What people invariably fail to realize is that not all men are created equal. Norwegians are not like Mexicans, and what works for Norway won't necessarily work for Mexico, and vice versa.
You knew... (Score:5, Interesting)
Re:You knew... (Score:5, Insightful)
It doesn't say seized. They will talk to those companies about a sale in due course.
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OTOH, a forced sale is generally at a poor price.
Re:You knew... (Score:4, Interesting)
"You knew, before you bought that property, that Mexico was in the hands of a looters' government... you knew that they'd seize those mines sooner or later. What you were after is your American stockholders." - Dagny Taggart
Unlike many countries with anglo-saxon tratiditions, most latin american countries (with romanic/latin trandition, mine included) are of the view that all the minerals/mines belong to the state, and only to the state. If a private wants to exploit the resource, it is due to a consession.
What this did was "kinda" closing a loophole in the law, and alingning the law with the prevalent tradition of said countries.
I am not saying this is good or bad, I am just tring to explain the prevalent mindframe/cosmovision of the peoples "south of the river"
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This has nothing to do with anything. These are worldwide standards, where massive corruption wants to control, for kickback and skimming reasons.
By Occam's Razor, this fully explains the situation.
You go into government to get in the way of business so as to enrich yourself.
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You realize the horror stories in that book of governmenr control of business and resources were culled from large numbers of real-world examples, right?
It is the exact opposite of some fevered imaginings. If anyone has fevered imaginings, I submit it is your rose colored glasses.
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Re: You knew... (Score:1)
Can silver be far behind? (Score:3)
Silver is also an important component in making electric, well, anything (including cars) and Mexico is the worlds #1 producer of silver [investingnews.com].
Wait until all kinds of metals start running short and nationalization of production becomes rampant, there are a lot of poorer regions of the world that have been taken advantage of and nationalizing production is how they intend to get some rewards for resources they hold.
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They will be looking at Norway and their sovereign wealth fund.
I wish the UK would do the same. We squandered North Sea oil, but we have excellent wind resources that could be exploited by the government, for the benefit of the citizens.
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Realistically, hope for Norwegian-like results, but expect something closer to the Venezuelan privatization efforts. Mexico isn't a Slavic level kleptocracy, but it is instilled in the government.
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I doubt there will be a silver shortage in any of our lifetimes, and half of all Tesla's produced already use LFP batteries with no lithium or cobalt and they will continue to move more production to LFP (as will other OEMs) as those cells continue to grow in energy density.
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Shit. I need to proofread. Meant to say LFP has no cobalt or nickel, obviously it has lithium.
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Meant to say LFP has no cobalt or nickel, obviously it has lithium.
I didn't mention that in my reply because I knew what you meant, but even the materials that remain in an LFP (beyond just lithium) will be harder and harder to come by.
Shortage is coming (Score:2)
doubt there will be a silver shortage in any of our lifetimes
Well you may want to have a look at demand and supply numbers [mining.com] and re-think that position.
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LFP batteries
Well, the L stands for Lithium, or what do you think it stands for?
Bolivia? Lithium? (Score:2, Funny)
Err, I don't think lithium was the "powder" that boosted the economy in Bolivia.
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They can have more than one type of powder and in my opinion we need increased exports of both.
I need that focussed energy to drive my electric car.
strategic mineral (Score:4, Insightful)
As the US military continues to lead the world in high-tech warfare, almost everything could be considered a strategic mineral on this side of the border. Can't build killer drones without lithium cells, and we sure as hell can't depend on China to supply us during wartime.
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Or, we could stop nationalism and embrace globalism, by getting rid of nationalist despots.
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There is probably some balance to be struck between the local interests of a nation in choosing when and how their resources are used, versus a world with peaceful and relatively unhindered trade of goods, materials, and services.
Like most things the two elegant extremes are not the fairest or most practical of choices. Damn gray area reality makes everything complicated.
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While I see the benefits of a more globalist society, the world is retreating from it (Brexit, American nationalism, trade wars, etc) primarily because global
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Greece and Italy bore the brunt of Germany's over-production through debt financing (from European banks primarily) then got blamed for their crises.
What nonsense is that supposed to be?
a) when the Euro was introduced, in Greece everyone adjusted his prices to the level of Paris/Berlin/London - but not the wages.
b) Greece is a kleptocracy and high corrupt population, yes the population: a bunch of cheaters trying to cheat each other even more than tourists
c) before the Euro was introduced most/many bonds h
I hate to break it to you guys (Score:5, Insightful)
Look up PEMEX on Wikipedia.
"He framed expropriation as a necessary national response to the injustice of the operations of foreign companies operating on Mexican soil."
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But this is almost certainly a direct response to exploitation by US based multinationals. Look up PEMEX on Wikipedia. "He framed expropriation as a necessary national response to the injustice of the operations of foreign companies operating on Mexican soil."
I think in this case it was Chinese multinationals, but that is in many a distinction without a difference from the Mexican point of view.
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While not really, as the article makes a point that this is primarily a political revenge, there is a significant distinction between Chinese and US investors. US investors enjoy much greater protections from national legislative due to USMCA.
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Article itself clearly states that this is political revenge on Mexican right for not letting him nationalise electric sector. There's only one lithium mine in Mexico and that one is Chinese.
This is not a country that is a major producer of lithium.
Re: I hate to break it to you guys (Score:1)
Right now weâ(TM)re seeing massive lithium shortages, the last decadeâ(TM)s demand on it makes it more expensive than gold and oil going from $2000/ton in 2005 to $475,000/ton spot price today. Even if they just get 1 mine operational, itâ(TM)s a massive printing press.
You will need to be able to mine all current known deposits of lithium in order to allow the US to completely convert to solar/wind/e-cars.
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I don't think you quite understand how mineral trade works. Spot prices mean nothing, as most contracts are long term futures. Spot prices are just there for speculators to gamble.
And contracts are negotiated based on long term averages. So your "oh my god, lithium is worth more than gold!" statement as evidence of earnings made by a mine is... daft. Exceedingly daft.
As for "we're totally going to do the renewable energy conversion with lithium", that is also a narrative for the ignorant. There isn't enough
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You can just buy small amounts of lithium from aliexpress. Or various mixes needed for batteries. They're literally sold by the kilo. No need to get involved with London Metals Exchange.
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If you want to make a quick one time order, there are avenues for that. I gave one out of several examples.
If you want a long term significant order, there are avenues for that as well. Mainly B2B channels.
Neither avenue is LME, where the speculation takes place, and where that spot price came from. That is a place for speculators.
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Aliexpress doesn't trade the minerals. Aliexpress is a site where independent merchants can put goods for sale.
And independent merchants get their goods from the same normal B2B supply chains.
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Longterm B2B contract pricing of course. That's how B2B supply chains work.
Are you now trying to cover for that shitty Chinese steel company that got utterly fucked on its speculatory activity at LME on nickel a couple of months ago and literally successfully pressured LME to cancel all trades of that day?
Because LME is a shit tier speculator exchange, controlled by the biggest speculators.
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No, they get them from evaporation operations in South America and mines across the world. Via long term B2B contracts.
Considering that you didn't dare to grab onto the LME and that Chinese steel company that got buttfucked on nickel trade a couple of months ago and then forced LME to cancel all trades that day, causing LME to get sued by a lot of traders who won on those traedes, I guess I know why you're here singing LME's praises as a chinabot.
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You can, currently a Lithium-Ion car battery goes for ~$2000, the small 30Ah motorcycle ones are $700. The Energizer AA lithium batteries are going for $50. Good luck!
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No. This is caused by nationalism, not globalism.
Re: I hate to break it to you guys (Score:2)
What do US based multinationals have to do with this?
PEMEX, nationalized oil production founded _1938_, what's that got to do with lithium today, TFS says is mined by a Chinese company?
Other resources in Mexico are actually mined by North American multinationals, today, and those aren't being nationalized. They're also not lithium. So what are you dragging the US into this for?
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The Chinese may be the villains of this scene, but the US is the one who set the pattern that Mexico is trying to resist.
These are sovereign nations and their citizens have the right to exist as something other than tools to be exploited to provide petroleum, lithium, or cheap fruit to US consumers.
You are correct that US multinationals are mining in Mexi
Sounds like communism to me! (Score:2)
Maybe we should free them AND their minerals!
(/s)
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So much criticism... (Score:2)
Well, it worked with oil in Venezuela, didn't it?
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Venezuela had far more issues than just that and Mexico has had it's oil nationalized for a long time already.
I don't think Mexico is going to enact price controls.
Mexico has been increasing food procution for a long time. Not nearly as reliant on imports.
It a much more stable nation with a much more diverse economy and is very intertwined with the US.
They already have a long track record with state owned enterprises (Pemex) and will probably still be on good terms with private firms even if it's just for c
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It's not an exception. Mexico has been doing this for over 100 years. At this point, it is situation normal.
third world vs. first world (Score:2)
from the /.summary:
The new mining law recognizes lithium as a heritage of the nation, and reserves it for the benefit of the people of Mexico.
If your intentions are nefarious then begin by proclaiming the opposite of what you intend.
The way to distribute the benefit of lithium to the people of Mexico is 1) auction mineral rights to the highest international bidders 2) compensate parties disadvantaged by mining, for example those who have their land seized by eminent domain 3) divide the remainder of funds by the population of Mexico and send everyone an equal check.
The way for corrupt government officials to enrich themselves i
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1) auction mineral rights to the highest international bidders
Like the oil all over the world? Owned by foreigners, except in Norway?
Mexico (Score:4, Insightful)
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Perhaps they have reserves no one considers reserves, e.g. because it is currently not worth exploiting.
We've seen this movie before (Score:2)
Re:Watch it go down (Score:4, Insightful)
You probably think Mexico can't do this properly, and you might even be right, but it won't be because the State Owned Enterprise model does not exist for them to follow if they choose.
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Oh please, we're not any more corrupt or inefficient then Europe, our nation is just far too conservative to ever consider such a thing.
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Number 24 on this list. [worlddata.info] So "could do better" rather than "less corrupt than Europe".
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Wow, marginally worse corruption then some European states, you sure got me good!
Meanwhile, for the other side of your claim, we are more productive then every large European economy besides Germany (and really there's almost no difference there) https://en.wikipedia.org/wiki/... [wikipedia.org]
But yeah sure, we're all lazy and corrupt over here. Bigot much?
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Enjoy your Labour productivity while everyone else in the world enjoys our shorter working week and 6 weeks annual leave.
Not that any of that has anything to do with how corrupt your 18th century government is.
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You said" "I understand that the American government is corrupt and inefficient"
I showed you we werent meaningfully more than the states who scored best in those categories.
So no, no moving goal posts here. Nice try though! Cant reason things out so you fall back on any random thing you can name. What's next, accuse me of making a strawman where there clearly isnt one?
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You then decided that "productivity" had something to do with the debate which an entirely different subject and where the goalpost shifting comes in.
Imagine my lack of surprise at your failure to understand any of this.