Mexico plans a state lithium company and asks Chinese mines

Mexico City — The Mexican president said Wednesday that he would set up a state-owned company to mine lithium, and apparently proposed to revoke one of the few existing permits held by Chinese companies.

President Andrés Manuel Lopez Obrador declared lithium a “strategic mineral” in October and stated that he would like to reserve future exploration and mining with the government. Lithium is an important component of batteries.

It was not clear whether Mexico would rely on private companies for inexperienced work. However, Lopez Obrador said Wednesday that a newly established government company would be mining and processing.

The president also said that private lithium mines in northern Sonora, where Chinese companies are involved, would not be allowed to start production.

“What they want to do is keep looting, and that’s it. We’re going to take legal action,” Lopez Obrador said.

“Lithium will be mined by the government,” Lopez Obrador said, specifically asked if that meant blocking the operation of the mine.

Its business, Bakanora Lithium, is Mexico’s only viable private lithium mine and was scheduled to begin production in 2023. It is currently owned by Ganfen International, a major lithium company in China.

In October, Secretary of the Interior Adan Lopez Hernandez said the eight concessions for lithium mining already approved in Mexico would be respected as long as metal production went well.

López Hernández said at the time that only one private mining company met these criteria. He didn’t name the mine, but apparently mentioned Bakanora Lithium, a project that hopes to produce 35,000 tonnes of lithium annually from 2023.

Lopez Obrador suggested that the concessions were illegally granted by the previous administration, saying, “This is where we need to investigate who gave these permits.”

Lithium’s declaration as a “strategic mineral” reserved for the state must still be adopted. This change is included in a law sent by Lopez Obrador to Parliament, which will also change the Constitution of Mexico and strengthen government control over electricity production and distribution. It requires a majority of both houses of parliament and a majority of state legislatures, two-thirds.

The bill eliminates much of the framework for private sector openness in the Mexican electricity market, guarantees state-owned utilities a majority market share and allows them to purchase electricity from private power plants as needed.

Associated Press