The Chilean government’s plan to demand a controlling stake in all future lithium projects will deter investment and risks stalling the clean energy transition, according to Canadian mining billionaire Robert Friedland.

The announcement, which sent share prices of Chilean lithium companies tumbling on Friday, would be “quite challenging for international capital, and it makes it harder to invest in Chile,” the chairman of Ivanhoe Mines said in an interview.

“Money is a coward — it runs away at the first sign of trouble.”

Demand for lithium, a core ingredient in electric vehicle batteries, is set to soar in the coming decades as automakers move away from gasoline and diesel powered models. Chile is the world’s second-biggest producer of the metal, and President Gabriel Boric is seeking a bigger role for the state in the sector, while also trying to build a domestic processing industry and protect the environment.

The policy bears some similarities to what President Joko Widodo is trying to do with nickel in Indonesia.

Santiago’s move will undermine Chile’s reputation as one of the safer places for foreign investors in Latin America and amounts to “nationalisation” of the country’s lithium sector, Friedland said. The mining magnate has been involved in developing some of the world’s biggest copper deposits including Oyu Tolgoi in Mongolia and Kamoa-Kakula in the Democratic Republic of Congo.

It’s “likely to set the government back a long ways – denying companies like Rio Tinto and Teck and BHP to come in there and invest,” Friedland said. “That will not end well, in my estimation.”

Governments are inefficient miners, and it was “much more efficient” to encourage the private sector to invest, he said, adding that “ill-considered” nationalist policies risked derailing the clean energy transition.

Santiago’s new policy comes as proposed mining royalty hikes in Chile, social unrest in Peru and the threat of tax increases in Panama have delayed copper projects in those countries and spooked investors. Copper, like lithium, is a core ingredient in clean energy applications and Chile and Peru are the world’s No. 1 and No. 2 producers of the metal.