Mexican Government Has a Plan B for Lithium Exploration

The federal government is looking to develop the Sonora Plan in 2023 and harness lithium exploitation under the lead of Litio para México (LitioMx). However, the authorities created a backup plan to include the private sector in case it needs support. Nonetheless, the plan might not be as viable as the government expects it to be.

According to a Mexican Geological Survey (SGM) document consulted by El Heraldo de México, the government has evaluated the possibility of including the private sector in the country's lithium deposit exploration in at least 82 areas. The government has injected US$2.5 million into SMG to carry out exploration work. Similarly, the Ministry of Economy (SE) has also invested in contracting 20 further geologists to explore the potential areas.

However, according to SGM, the federal government’s fallback plan, which considers the participation of private companies to support exploration duties, is not economically feasible. Firstly, SMG detected that plan B would result in a 41 percent increase in costs and would not provide the required geological and mining information platform, since it would require the inspection of SGM specialists. 

SGM pointed out that there are other obstacles to tackle, especially the limited geological knowledge of the areas with potential lithium deposits. According to experts, SGM does not know how much lithium discovered deposits have, nor can it pinpoint the quality of the mineral in these areas. This also limits the survey’s capability to determine which areas are economically feasible.

According to SGM, exploring unfeasible lithium projects might result in higher costs than expected. Similarly, it is not possible to determine whether feasible projects would generate surplus value. Since there is no solid information available regarding the availability of the mineral in the 82 determined areas, all efforts should be focused on studies and their evaluation.

Currently, there is only one lithium deposit that has proven reserves: the Bacadehuachi deposits, owned by the China-based Ganfeng Lithium. however, this deposit has also been subject to criticism, arguing that the deposit could not be economically feasible since extracting lithium from clay deposits is an underdeveloped and unproven method because the mineral is more commonly found in salt deposits. On Nov. 11, 2022, LitioMx reported that it calculated that separating lithium from clay would cost US$4,000/t, which made the process economically feasible, as reported by MBN.