Can a Great Lithium Deposit Discovery Live Up to The Hype?

Mexico shows brilliant potential to produce lithium, considered a critical component for batteries used in electric vehicles and energy storage important to the global energy transition, and government officials, like Flor de Maria Harp, Director of the National Geological Service, have, backed uncommonly high concentrations findings of lithium in a deposit developed by Bacanora Lithium. Nevertheless, extracting the deposit could prove to be more challenging than expected.

Bacanora Lithium has announced its samples found in Sonora, reporting that the average amount of lithium found lies around 3,415 parts per million (PPM). This is higher than other concentrations found in the country, confirmed Harp to Reuters in an independent backing of the company’s findings. “Bacanora is really a very good deposit,” she said. The National Geological Service examined a further ore sample from the same project which even held 16,000 PPM. The average of lithium found in deposits lies somewhere between 200 and 6,000 ppm, the Service estimated in 2020.

However, extracting the deposit could prove to be problematic. Harp said the lithium ore is clay based. Extracting ore from clay has thus far not been achieved successfully on a commercial basis. “Mexico's only possible lithium source to go into production is a clay type. No country in the world has yet produced any lithium from such rocks. Bolivia, then, is going to advise us on something for which they have no idea or experience with? The company investing in Sonora has published technical reports that state that lithium can be separated from clay and, in a second step, converted into lithium carbonate. The development of the mine and construction of a chemical plant will require over US$400 million in investment,” said Armando Alatorre, President of the College of Mining Engineers, Metallurgists and Geologists of Mexico (CIMMGM) in a recent Expert Opinion for Mexico Business News.

Bacanora nonetheless claims it is closest to commercial lithium production of all permit holders in Mexico. The company expects to be operational by 2023, having pushed back its forecast already in the past.

If these and other projects do manage to reach production, Mexico could become a key global lithium producer alongside current frontrunners Australia and Chile, although to meet the large global demand a lot of work remains to be done. “[With permits] obtained and if the company can continue, Mexico will produce a fraction of what is highly demanded in the world today,” said Alatorre. Obtaining such permits for private companies has become more difficult under the López Obrador administration. But since Mexican authorities announced they would no longer seek public ownership of lithium and instead look toward the private sector this situation could change soon.

In terms of potential, Mexico’s reserves look promising.  Mexico ranks ninth in the world among countries with the largest lithium reserves with 1.7 million tons, according to the US Geological Survey.