LitioMx Opens Door to Private InvestmentBy Paloma Duran | Fri, 09/02/2022 - 07:08
The Mexican government does not have sufficient public funds to develop the country’s lithium industry. Therefore, it will be open toward the participation of private investors. In addition, the government announced that the new state-owned lithium company will be located in Sonora, aiming to create a new hub for lithium-based projects and projects as well as renewable energy developments.
President López Obrador announced that Lithium for Mexico (LitioMx), which was created on August 23 and oversee the lithium industry in the country, will be a public-private company. The president stressed that he decided to accept private investment since developing the new industry requires heavy investment that the government cannot provide on its own.
Consequently, the government will review eight contracts awarded by past governments to see if they will be able to participate.
“We would not have enough if it was only public, it requires a lot of investment. We need the private sector. It will have a lot of support from national and foreign investors. They are interested in participating in the new Mexican industry. However, we will make sure that Mexicans benefit above anyone else. My government will pursue that this new resource belongs to the people,” said Lopez Obrador.
In addition, the president also announced that LitioMx will be located in Sonora. The government wants to turn the state into the new center for renewable energy projects in the country, especially for the manufacture of Electric Vehicles (EVs). “We are developing a plan for Sonora to become a state of renewable energy and lithium production as well as all lithium-based products.”
After months of speculation and expectation, the government published a decree in the Federal Official Gazette (DOF) that created LitioMx as a decentralized organism on Aug. 23, 2022. The company will exclusively manage the extraction, transformation and transportation of lithium and its derivatives. According to the decree, Minister of Energy Rocío Nahle will be the Director of the company’s Board. “LitioMx’s main objective is the exploration, exploitation and harnessing of lithium located in Mexico, as well as the management and control of the mineral’s value chain,” stated Article 2 of the decree.
Mining experts have warned that despite the government nationalizing the resource, it would not be able to exploit the resource for another 7 to 13 years. This is because the government lacks the studies, technology and adequate extraction methods to make lithium exploitation economically viable.