Foreign Investment Needed to Exploit Baja California’s Lithium

Two lithium deposits were found in In Baja California and authorities are now looking for foreign investors to extract it. Kurt Honold Morales, Head of Baja California’s Ministry of Economy and Innovation, said the state seeks to join the manufacturing supply chain of electric vehicles (EVs).

Morales mentioned that local authorities met with Pablo Taddei, Director, Litio para México (LitioMx), the state-owned company for the exploration and exploitation of lithium. “He confirmed that there is lithium in Baja California, specifically in two places in Mexicali, Cerro Prieto and in the Guadalupe Canyon,” he added. 

However, the Minister of Economy and Innovation specified that the deposits are not new and have been operating for 20 years but until now they gained the approval to be extracted. “This means that we have the foundations to bring foreign companies to invest in Baja California and extract the lithium,” said Morales.

Lithium is used in the manufacturing of batteries for different devices like cell phones and EVs. Morales added Baja California’s government is looking for companies that manufacture EVs to install their operations in the state.

In addition, he stated that companies with concessions to extract minerals in these locations including lithium, zinc, magnesium and iron, are already on the local government’s radar to foster collaboration. 

Recently, LitioMx announced that it will promote joint ventures between the state-owned company and private companies. However, private players will have to cede majority participation to the government, though tax exemptions could be granted to boost the start-up of these projects. 

Taddei pointed out that private companies will be able to join the Mexican lithium industry by partnering with the company, created in 2022 by President López Obrador to oversee Mexico’s nascent lithium industry. However, the government will still exercise control over the projects. "There is no doubt that the Mexican government should have control in a strategic association with private companies," said Taddei. As for the percentage that the government wants to own of each project, Taddei stressed this will depend on each deposit. 

Taddei noted that LithiumMX will also hold a stake in all technology patents derived from lithium projects in Mexico. He did not say when the company is expected to launch its first project but assured that Mexico will benefit from the global lithium boom.