In a move that made many investors nervous, Chilean President Gabriel Boric recently announced that he would be nationalizing the lithium industry in his country. As one of the most important minerals for the renewable energy movement, particularly for EV batteries, the strong reaction from investors was understandable. But looking at past resource nationalizations may provide a clue as to how this one may play out, contends an article in Barron’s.

In places where the markets for vital minerals are vulnerable and tumultuous, state ownership could actually decrease some of that volatility. Indeed, Codelco, the copper produced that has been state-owned in Chile since 1971, contributes billions to the Chilean government and is the biggest copper producer in the world. Boric indicated that he would rely on Codelco’s knowledge and skills in helping to nationalize the lithium industry, according to the article. But over the border in Bolivia, the nationalization of lithium nearly 20 years ago has slowed economic development due to the Evo Morales administration’s rigid restrictions against private and foreign participation. Even today, the country is still unable to produce lithium on a commercial scale.

But Chile’s lithium sector is more developed than Bolivia’s was at the time of nationalization; Chile is the second-largest producer of the mineral and has the world’s largest reserves. Boric’s plan also seems to be more flexible, and open to partnerships. However, nationalization tends to drive away any potential partners, particularly if the terms for the industry’s companies are not fair. In that situation, the Chilean government would be forced to proceed on its own, which would be more challenging, especially as the industry shifts from simply extracting into manufacturing and technological advancements, the article contends.

And while Boric’s plan intends to take environmental and social concerns into consideration, he faces a hurdle from local indigenous groups and environmentalists who are protesting the brine evaporation method of production. If Boric’s administration can decrease the conflict with those groups in a more productive way than the private companies, lithium production in Chile could become even more steady and efficient. Of course, many Latin American governments have found that balancing the need for revenue from natural resources with the social and environmental demands of their people is a struggle. There’s no end to the examples of governmental abuse, both to the environment and to the people. Which trajectory Boric’s plan will take remains to be seen, especially since the plan has yet to clear Congress before he can actually enact it.