Sunday, March 3, 2024

US, Canadian companies can mine Mexico’s lithium, but as minority partners: AMLO

United States and Canadian companies will be invited to participate in Mexico’s nascent lithium mining sector, President López Obrador said Tuesday.

However, any foreign and private companies that enter the sector will be required to be minority partners in joint ventures with the state-owned lithium company, he told reporters at his regular news conference.

“Lithium already belongs to the nation,” López Obrador said, referring to the nationalization of the alkali metal earlier this year.

“In all cases, there has to be an association of the public company with private companies, and we don’t want the lithium to be taken out of Sonora,” he said.

President Lopez Obrador of Mexico
President Lopez Obrador has been a main figure behind the drive to nationalize lithium, although Mexico doesn’t yet have any lithium mines. Presidencia

López Obrador announced the creation of a state-owned lithium company, Litio para México (Lithium for Mexico), in August. There are large potential reserves of the metal in Sonora, but there are doubts about Mexico’s capacity to exploit them as they are mainly in clay deposits that are technically difficult and expensive to mine.

Any lithium extracted in Sonora will have to be used to make electric vehicle (EV) batteries at plants in that state, López Obrador said. In addition, the batteries made in Sonora will solely be used in EVs made in the same state, he said, stressing that the lithium industry should benefit the local economy.

“A tendering process will be launched to see what United States and Canadian companies will participate,” he said, apparently  indicating that the government will also seek to attract U.S. and Canadian battery and vehicle manufacturers.

With regard to the construction of infrastructure needed for lithium extraction, U.S. and Canadian companies will have to form partnerships with the state, in which the foreign company has a maximum 49% interest, López Obrador said.

Bacanora lithium carbonate pilot plant in Hermosillo, Sonora
Currently, Mexico’s only major lithium company that’s made advances is foreign: the Chinese firm Ganfeng Lithium, with rights to mine 100 hectares in Sonora, has built a lithium carbonate pilot plant in Hermosillo and plans to mine 30,000 tonnes a year. Bacanora

“It can be 51-49, but [it must be] majority Mexican,” he said. “… For the construction of all the infrastructure, … only national, United States and Canadian companies, only companies from the three countries of the [North American free trade] agreement.”

Foreign companies, including China’s Ganfeng Lithium, were awarded contracts to exploit Mexico’s potential lithium reserves before nationalization of the metal, and their contracts will be honored. According to its subsidiary company in Mexico’s website, it owns 10 mining concession areas covering approximately 100,000 hectares in northeast Sonora and eventually plans to mine 35,000 tonnes of battery-grade lithium a year there.

While lithium has not yet been extracted in Mexico, the Finance Ministry estimates that reserves in Sonora alone could be worth as much as US $600 billion. There are also smaller potential lithium deposits in states such as Baja California, San Luis Potosí and Zacatecas.

With reports from El Financiero and Reuters

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