Mexican Government Advances Lithium Plans

President López Obrador announced that the state company in charge of the exploration and exploitation of lithium will soon be presented. In addition, he stressed that lithium concessions granted to private companies in the past will only remain valid if they where filed with a request to produce the resource. However, according to experts, these requirements are unfair because concessions usually do not feature such requests. What is more, regulation concerning permits and concessions cannot be altered retroactively.

López Obrador announced that the name of the company that will be in charge of the lithium value chain in Mexico will be announced this week. The president explained that the government took a long time to present the company because it was difficult to find a name  since many options were already registered and the word Mexico had to be included. In addition, he stated that the new company will be managed by the Ministry of Energy.

“Fortunately, there are few private companies that have concessions. It will be reviewed if the concessions are specifically for lithium. If they are not, they will not be recognized,” added López Obrador.

Armando Alatorre, President, CIMMGM, told MBN that even though it appears that the government is being fair, past concessions are at risk because concessions are not requested with a specific mineral in mind in Mexico. “The government set parameters and requirements that are not going to be met. This is not how mining  concessions work and the lithium industry, like any other, takes years to develop. These parameters are impossible to meet and therefore unfair,” said Alatorre.

Ruben Cano, Founding Partner, CR Legal Partners Mexico, explained to MBN that the modifications to the Mining Law should not affect past concessions since all of them are protected by the principle of non-retroactivity of the Mexican Constitution. Art. 14 establishes that a law will not be issued retroactively if it harms the rights granted to a person or entity. As a result, the government cannot revoke past concessions this way.  

“From a very strict legal point of view, past concessions cannot be withdrawn. However, this does not mean that those in the lithium industry are not at risk, as there are many ways operations can be suspended. The government has used other routes to complicate the operation of mining projects, such as making it difficult to process permits with SEMARNAT. I recommend those who have lithium concessions to take extreme precautions and strictly comply with the legal regulations to maintain their permits,” emphasized Cano.