The recently approved Mining Law reform banned the possibility of new private participation in lithium and other resources deemed “essential.” It has created an uncertain environment in the mining industry that may result in the loss of investment and jobs. Within this context, mining companies have shown interest in other producing countries in the region.
According to the National Confederation of Industrial Chambers (CONCAMIN), if the reform is changed for one that allows private participation, 350,000 jobs would be added to the more than 3 million mining industry already offers. In contrast, the reform may cause Mexico to lose over US$24.2 billion in investment. Investment announcement regarding lithium projects in the country have not materialized recently. To the contrary: companies have shown more interest in South American lithium producing countries, including those that have developed projects in Mexico.
Gangfeng Lithium, which holds a key interest in the Bacanora Lithium Project located in Sonora, announced it started the construction of the Mariana Project in Argentina, through an investment of over US$600 million and an estimated production of 20,000t/y.
According to the company, the fully-owned property stretches across 236km². It added that during the construction phase, the project will create over 1,300 direct and indirect jobs and another 445 during the exploitation phase.
In the same vein, the French nickel and magnesium producer Eramet announced its intention of developing lithium projects in South America, which includes its plants located the so-called Lithium Triangle between Argentina, Bolivia and Chile. Currently, is developing a lithium project in Argentina with Tsingshan, a Chinese steel producer. The companies aim to start lithium production by 2024.
Both Gangfeng and Eramet said they committed to mitigate their impact on the environment and make their process more efficient. Gangfeng highlighted the use of a photovoltaic solar system to source electricity for its plant located in the Llullallaico salt deposit.
Pablo Rutigliano, Founder and Director, The Latin American Chamber of Lithium (CALBAMERICA), said that open markets are necessary, though they should be regulated well. He commented that Mexico’s recent lithium nationalization limits the industry’s development. “I am not pro lithium nationalization, I support the creation of a market where everyone can participate in establishing reference prices and in the exploitation and transformation of raw material in the region,” Rutigliano added.
Opposition legislators have requested the National Supreme Court of Justice (SCJN) to annul the Mining Law reform. The result is expected to be delivered in the coming days.