Lithium: Mexico and Bolivia

President Andres Manuel López Obrador stated during his May 19 morning press conference that as a result of President Luis Arce’s visit to Mexico, it was agreed that, based on Bolivia's experience in the exploitation of lithium, that country would help Mexico analyze the benefits for the nation regarding the mineral. Tatiana Clouthier, Ministry of Economy, will be responsible for establishing the communications with the Bolivian government.

Is it a reasonable idea to have Bolivia advising Mexico on the subject of lithium?

From a strictly technical point of view, that country’s experience in producing this element is extremely narrow, to say the least. A British Geological Survey report (2016) states that Bolivia has substantial potential for lithium development, with nearly 8.9 million metric tons (22 percent of the world's total), ahead of Chile (18 percent), the US (17 percent), Argentina (16 percent), China (8 percent) and the Democratic Republic of Congo (6 percent), to cite the six largest. On the other hand, according to the prestigious yearly US Geological Survey’s Mineral Commodity Summaries publication, Bolivia has not reported a single ton of production in this century.

On May 28, 2021, the state-owned company Yacimientos de Litio Bolivianos disclosed sales from potassium chloride and lithium carbonate (January to May of this year). No amounts appear about the tons produced in that period. Also, it said that an industrial-scale plant is needed to increase sales volume. Besides, it reports that the 2021 sales of lithium carbonate account for 530 tons, equivalent to nearly 0.6% of the 2020 world output of 82,000 metric tons. Such data indicates production is from a pilot plant, and the country is far from being in a position to offer any technical advice. On other words, the guidance it could eventually provide is, at best, about how to start a mini-scale operation.

Furthermore, Yacimientos de Litio Bolivianos’ web page displays an invitation (from April 30 to May 31) to investors to develop the resources at Uyuni, Coipasa, and Pastos Grandes. However, Bolivia has been quite erratic in its policies about developing its lithium potential. During Evo Morales’ administration, a $1.3 billion contract was awarded to a German private company to work the Salar de Uyuni deposit, which included plans for an electric battery plant where most of such lithium could be deployed. But, last November, Bolivia, walked away from that commitment, apparently on the grounds that locals felt they were not getting enough remuneration from the project. For the time being, they are working on their own and hoping to find the technical and economic resources to grow. Will it work or be rejected, as happened with the German company?

In addition, one has to acknowledge that lithium has three types of main geological occurrences: pegmatite, salar, and clay; each requires quite different know-how to extract, process and sell. Bolivia, Chile, Argentina, and partially China have salar, where the metal is present in near-surface, diluted brines that have to be concentrated and extracted to obtain the highly sought-after lithium carbonate. In this type of deposit, the three other countries have decades of experience exploring, developing and trading, whereas Bolivia is just taking its first steps. Why turn to Bolivia and not the others countries or a combination?

Mexico has no salar or pegmatite deposits that could account for any near-future (five- to 10-year span) production. 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 a $400-plus million investment. Once obtained and the company can continue, Mexico will produce a fraction of what is highly demanded in the world today.

Is it possible to find in Mexico any pegmatite or salar deposits? It might be. The Mexican Geological Survey has 15-20 possible locations but any exploration process will require millions of dollars and perhaps up to 10 years before any results emerge, and success is not guaranteed.

About a week after the president's announcement, Sen. Alejandro Armenta, who presented the initiative to "nationalize" lithium in Mexico in November 2020, said that a proposal to create the National Lithium Institute is underway by the Ministry of Economy. That seems like a change of tone from the Litiomex entity he first proposed to oversee all aspects related to the element. He further declared that, after election day, on June 6, there would be meetings with ambassadors from other relevant lithium producers such as Argentina, Chile, Canada, China, Russia, Germany and Indonesia. But, again, the last three have no lithium production recorded this century. In the case of Germany, its experience in making lithium batteries could be a good option. Later, in an interview with Reuters on June 2, Armenta declared that instead of nationalization, the idea now is to welcome private investors to develop the Mexican lithium industry through a new bill coming in September. 

The question for Mexico could be: Why not seek advice and investment from China regarding lithium-carbonate production as well as lithium batteries for plug-in vehicles? That could be a win-win situation for Mexico's mining, chemical, electrical, and, eventually, automotive industries.