All Mexico’s plans to nationalize lithium
In Mexico, the bill to nationalize lithium is advancing: after the approval of the House, the approval of the Senate remains. The country should contain the largest deposit in the world, but doubts are not lacking. All the details
In Mexico, the Chamber of Deputies approved some changes to the national mining law (the Ley Minera of 1992) to include lithium among the "goods of the nation": only the state, therefore, will be able to proceed with exploration, extraction and exploitation of domestic reserves.
Lithium is a metal of great strategic value because it is used in the batteries that power electric vehicles and allow the storage of renewable electricity. For the next few years, a strong increase in its demand is expected, driven precisely by the drive towards electrification of mobility but also by the transition towards less emissive energy systems, given that storage technologies will be fundamental to compensate for the intermittency of wind and of solar.
THE POLITICAL CONTEXT
The amendments were approved with 298 votes in favor and 197 abstentions. The main opposition parties – the center PRI; the center-right PAN; the PRD and the center-left Citizen Movement – did not participate in the vote.
The law is promoted by President Andrés Manuel López Obrador, a left-wing nationalist: he is very critical of the 2013 energy reform that liberalized the sector and intends to bring it back under state control. However, last Sunday his proposed constitutional amendment for the reform of the electricity market, which strengthened the role of the state and penalized private operators , did not obtain the necessary two-thirds majority in Congress and was rejected.
In the case of the mining reform for the nationalization of lithium, however, since it is not a constitutional change, a simple majority was enough for the party of the president (MORENA, on the left). After approval by the House, the bill now goes to the Senate.
WHAT MEXICO WILL DO ON LITHIUM
The bill bans private participation in the Mexican lithium market. Currently Mexico does not produce it, but it could host very significant deposits: that of Bacanora, in the state of Sonora, is considered the largest in the world (over 243 million tons), but it is contained in clay deposits which make it complex and expensive. the extraction. The project – called Sonora Lithium – is owned by the British company Bacanora Lithium in partnership with the Chinese Ganfeng Lithium. Preliminary activities began last year.
In the country there are about twenty concessions already active for the extraction of lithium, in the hands of a dozen companies. Critics of the reform point out that, under Mexican law, the mineral deposits are already owned by the state, which in fact entrusts them in concession, and that the reform will only have the effect of discouraging private investment.
It is unclear whether the Mexican state possesses the economic and technical capabilities necessary for the extraction and processing of lithium. Taking as an example the oil sector, of which the country is a historic producer, the state-owned company PEMEX had to rely on private individuals for the exploitation of unconventional hydrocarbon fields in deep waters due to lack of know-how .
In October 2020, the ex-Mexican secretary of the economy, Graciela Márquez, wanted to cool the enthusiasm about Mexican lithium reserves and their impact on the national economy, recalling that the country has ample resources of clay, but the content of lithium is low and the process to extract it is "very expensive".
LITHIUM AND NOT ONLY
In addition to lithium, the bill states that the state could take control of "other minerals declared strategic by the federal government."
According to the document, a state-owned lithium company will be created within ninety working days of the law being passed, possibly led by the Minister of Finance, Economy or Energy. The Mexican Geological Survey will assist you in finding the deposits.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/messico-litio/ on Tue, 19 Apr 2022 13:25:13 +0000.