Europe Looks for Lithium Suppliers: Mexico Must Step Up

The European Commission (EC) presented an Action Plan on Critical Raw Materials, the 2020 List of Critical Raw Materials and a foresight study on critical raw materials for strategic technologies and sectors from the 2030 and 2050 perspectives. The action plan includes diversifying Europe’s supply sources. Mexico, which holds the world’s largest lithium deposit, is presented with a massive opportunity.

The action plan looks at current and future challenges and proposes actions to reduce Europe's dependency on third countries, diversifying supply from both primary and secondary sources and improving resource efficiency and circularity, the EC reported. Actions are meant to foster Europe’s transition towards a green and digital economy. The list of critical raw materials has been updated to reflect the changed economic importance and supply challenges based on their industrial application, the EC noted. Lithium, which is essential for a shift to e-mobility, has been added to the list for the first time.

“A secure and sustainable supply of raw materials is a prerequisite for a resilient economy. For e-car batteries and energy storage alone, Europe will for instance need up to 18 times more lithium by 2030 and up to 60 times more by 2050. We cannot allow to replace current reliance on fossil fuels with dependency on critical raw materials. This has been magnified by the coronavirus disruptions in our strategic value chains. We will therefore build a strong alliance to collectively shift from high dependency to diversified, sustainable and socially-responsible sourcing, circularity and innovation,” said Maros Sefcovic, EC Vice President for Interinstitutional Relations and Foresight.

The EC explained that developing strategic international partnerships to secure the supply of critical raw materials is among the key actions it will undertake. Regarding lithium, Europe’s supply is heavily dependent on a single producer, Chile, which according to Deutsche Welle supplies 78 percent of the continent’s battery metal. The EC is therefore eager to diversify. Its recovery plan from the COVID-19 crisis is centered around the European Green Deal and the new EU Industrial Strategy, which will require massive amounts of lithium.

The EC remarked that pilot partnerships with suppliers like Canada and countries in Africa will start in 2021. Mexico is not part of these pilot partnerships but the North American country is in a privileged position to become a top lithium supplier for Europe.

The largest lithium deposit in the world is located in Sonora. It contains roughly 244 million tons and is being developed by a British-Chinese JV. “Lithium demand will continue to grow 15-20 percent up to 2025 and grow by 10 percent thereafter. Post-2025, renewable energies such as solar and wind power will start to play a larger role in demand as their presence in the market continues to grow. The world will need large grid storage batteries that are lithium-based,” Peter Secker, CEO of Bacanora Lithium, one of the companies developing the Sonoran deposit, told Mexico Business News. 

It will be up to the Mexican government and industry to seize the opportunity that Europe’s lithium supply chain reshuffling represents. Mexico’s geology, geography and infrastructure are favorable. In addition, Mexico and Europe already have a free trade agreement with each other. The relevance of a comprehensive, internationally-minded industrial policy, linking the mining sector to Mexico’s overall development, cannot be overemphasized.