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Sales vs. profit-based royalties: Evidence from lithium in LAC countries

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  • Reyes-Tagle, Gerardo
  • Estupiñan, Claudio Karl

Abstract

Lithium is central to the global energy transition, with Argentina, Brazil, and Chile holding a significant portion of the world's reserves. Designing royalty regimes that capture rents without discouraging investment is therefore a critical policy challenge. While theory emphasizes the neutrality of profit-based instruments, common practice relies on administratively simpler sales-based royalties. In the analysis of these alternatives, existing studies have mostly used partial equilibrium approaches that overlook economy-wide effects.

Suggested Citation

  • Reyes-Tagle, Gerardo & Estupiñan, Claudio Karl, 2025. "Sales vs. profit-based royalties: Evidence from lithium in LAC countries," Resources Policy, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:jrpoli:v:111:y:2025:i:c:s0301420725003216
    DOI: 10.1016/j.resourpol.2025.105779
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    References listed on IDEAS

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