IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v15y2022i15p5569-d877149.html
   My bibliography  Save this article

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

Author

Listed:
  • David R. Mares

    (Department of Political Science, University of California, San Diego, CA 92093, USA
    James A. Baker III Institute for Public Policy, Center for Energy Studies, Rice University, Houston, TX 77005, USA)

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.

Suggested Citation

  • David R. Mares, 2022. "Understanding Cartel Viability: Implications for a Latin American Lithium Suppliers Agreement," Energies, MDPI, vol. 15(15), pages 1-26, July.
  • Handle: RePEc:gam:jeners:v:15:y:2022:i:15:p:5569-:d:877149
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/15/15/5569/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/15/15/5569/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Vizcarra, Catalina, 2009. "Guano, Credible Commitments, and Sovereign Debt Repayment in Nineteenth-Century Peru," The Journal of Economic History, Cambridge University Press, vol. 69(2), pages 358-387, June.
    2. François MELESE, 1980. "Cartel Extraction and Backstop Entry," Discussion Papers (REL - Recherches Economiques de Louvain) 1980034, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Robert S. Pindyck, 1977. "Cartel Pricing and the Structure of the World Bauxite Market," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 343-360, Autumn.
    4. repec:bla:scandj:v:83:y:1981:i:2:p:289-317 is not listed on IDEAS
    5. Mr. Alberto Behar & Robert A Ritz, 2016. "An Analysis of OPEC’s Strategic Actions, US Shale Growth and the 2014 Oil Price Crash," IMF Working Papers 2016/131, International Monetary Fund.
    6. Nancy Gallini & Tracy Lewis & Roger Ware, 1983. "Strategic Timing and Pricing of a Substitute in a Cartelized Resource Market," Canadian Journal of Economics, Canadian Economics Association, vol. 16(3), pages 429-446, August.
    7. Teece, David J. & Sunding, David & Mosakowski, Elaine, 1993. "Natural resource cartels," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 24, pages 1131-1166, Elsevier.
    8. John D. Graham & John A. Rupp & Eva Brungard, 2021. "Lithium in the Green Energy Transition: The Quest for Both Sustainability and Security," Sustainability, MDPI, vol. 13(20), pages 1-23, October.
    9. Conde, Marta, 2017. "Resistance to Mining. A Review," Ecological Economics, Elsevier, vol. 132(C), pages 80-90.
    10. M.A. Adelman, 1994. "The World Oil Market: Past and Future," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-11.
    11. W. P. Pauw & P. Castro & J. Pickering & S. Bhasin, 2020. "Conditional nationally determined contributions in the Paris Agreement: foothold for equity or Achilles heel?," Climate Policy, Taylor & Francis Journals, vol. 20(4), pages 468-484, April.
    12. Alberto Fonseca, 2010. "How credible are mining corporations' sustainability reports? a critical analysis of external assurance under the requirements of the international council on mining and metals," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 17(6), pages 355-370, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benchekroun, Hassan & Gaudet, Gerard & Van Long, Ngo, 2006. "Temporary natural resource cartels," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 663-674, November.
    2. Gérard Gaudet, 2007. "Natural resource economics under the rule of Hotelling," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1033-1059, November.
    3. Bianca Alves Almeida Machado & Lívia Cristina Pinto Dias & Alberto Fonseca, 2021. "Transparency of materiality analysis in GRI‐based sustainability reports," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 570-580, March.
    4. Devarajan, Shantayanan & Fisher, Anthony C, 1981. "Hotelling's "Economics of Exhaustible Resources": Fifty Years Later," Journal of Economic Literature, American Economic Association, vol. 19(1), pages 65-73, March.
    5. Simone Pizzi, 2018. "The Relationship between Non-financial Reporting, Environmental Strategies and Financial Performance. Empirical Evidence from Milano Stock Exchange," Administrative Sciences, MDPI, vol. 8(4), pages 1-9, November.
    6. Jean-Baptiste Bahers & Paula Higuera & Anne Ventura & Nicolas Antheaume, 2020. "The “Metal-Energy-Construction Mineral” Nexus in the Island Metabolism: The Case of the Extractive Economy of New Caledonia," Sustainability, MDPI, vol. 12(6), pages 1-18, March.
    7. Gil-Alana, Luis A. & Dadgar, Yadollah & Nazari, Rouhollah, 2020. "An analysis of the OPEC and non-OPEC position in the World Oil Market: A fractionally integrated approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 541(C).
    8. Deanna Kemp & John R. Owen, 2022. "Corporate social irresponsibility, hostile organisations and global resource extraction," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1816-1824, September.
    9. John R. Owen & Deanna Kemp, 2024. "Corporate Responses to Community Grievance: Voluntarism and Pathologies of Practice," Journal of Business Ethics, Springer, vol. 189(1), pages 55-68, January.
    10. Hart, Rob & Spiro, Daniel, 2011. "The elephant in Hotelling's room," Energy Policy, Elsevier, vol. 39(12), pages 7834-7838.
    11. Longinos Marín & Alicia Rubio & Salvador Ruiz de Maya, 2012. "Competitiveness as a Strategic Outcome of Corporate Social Responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 19(6), pages 364-376, November.
    12. Cornelie Crous & John R. Owen & Lochner Marais & Samkelisiwe Khanyile & Deanna Kemp, 2021. "Public disclosure of mine closures by listed South African mining companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(3), pages 1032-1042, May.
    13. Ki‐Hoon Lee, 2017. "Does Size Matter? Evaluating Corporate Environmental Disclosure in the Australian Mining and Metal Industry: A Combined Approach of Quantity and Quality Measurement," Business Strategy and the Environment, Wiley Blackwell, vol. 26(2), pages 209-223, February.
    14. Saenz, Cesar, 2023. "The social management canvas for the mining industry: A Peruvian case study," Resources Policy, Elsevier, vol. 85(PB).
    15. Jaakkola, Niko, 2019. "Carbon taxation, OPEC and the end of oil," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 101-117.
    16. Leena Suopajärvi & Karin Beland Lindahl & Toni Eerola & Gregory Poelzer, 2023. "Social aspects of business risk in the mineral industry—political, reputational, and local acceptability risks facing mineral exploration and mining," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(2), pages 321-331, June.
    17. Carmelo Reverte, 2021. "Do investors value the voluntary assurance of sustainability information? Evidence from the Spanish stock market," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(5), pages 793-809, September.
    18. Sarah Lauwo, 2018. "Challenging Masculinity in CSR Disclosures: Silencing of Women’s Voices in Tanzania’s Mining Industry," Journal of Business Ethics, Springer, vol. 149(3), pages 689-706, May.
    19. Sonja Kivinen & Kaarina Vartiainen & Timo Kumpula, 2018. "People and Post-Mining Environments: PPGIS Mapping of Landscape Values, Knowledge Needs, and Future Perspectives in Northern Finland," Land, MDPI, vol. 7(4), pages 1-23, December.
    20. Balluchi, Federica & Lazzini, Arianna & Torelli, Riccardo, 2020. "Credibility of Environmental Issues in Non-Financial Mandatory Disclosure: Measurement and Determinants," OSF Preprints g73w5, Center for Open Science.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:15:y:2022:i:15:p:5569-:d:877149. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.