Lithium and the New Wave of Resource Nationalism

Just as the supply chain crisis appears to be stabilizing, a new set of laws in southern Africa threatens one of the world’s essential commodities. Last month, Zimbabwe banned the export of raw lithium. The material is a vital part of batteries that power everything from smartphones to electric vehicles. Zimbabwe is home to the world’s sixth-largest known lithium reserves and has long been an important source for the Chinese market, given the country’s close trade connections. Will Zimbabwe’s decision usher in a new wave of resource nationalism as other countries move to protect their raw resources from foreign exploitation?

Probably not, but the events demonstrate how the global commodity market for everything from oil to semiconductors is changing. With new semiconductor manufacturing plants in the United States and the slow but steady de-dollarization of the international oil trade, the commodity trade is transforming quickly. Zimbabwe’s move to protect local industry highlights how developing countries could try to protect their resources.

Lithium prices have surged more than 1,100 percent to record highs over the past two years. Lithium’s value will continue to increase as electric vehicles replace traditional combustion engines. Bloomberg reports that half of all car sales could be electric vehicles by 2030, up from just 9…