Mexico Could See First Lithium Production in 2028
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Mexico Could See First Lithium Production in 2028

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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Fri, 05/12/2023 - 08:22

While President Andrés Manuel López Obrador's idea is to put Mexico on the map as one of the major lithium suppliers, the first solid national production is not expected until 2028, according to Pablo Taddei, CEO of the newly established LitioMX.

The current global lithium scenario is dominated by countries such as Australia, China and Chile, although Taddei assures that Mexico is not entering the market late. Nevertheless, demand for lithium continues to grow and although it is no longer at its peak, when it reached US$84,500/t in November 2022, the price has risen by 99% in two years. As of mid-April, it stood at US$25,800/t, according to Asian Metal Inc.

While major industries like automotive and pharma struggle to secure their supply, the Mexican government is just beginning to lay the groundwork to build an industry. The path ahead still appears unclear, but a timeline is being established internally. Plans for the next two years include construction of the first plants for metal processing and, within five years, the country should report its first production of lithium carbonate of the required grade for battery manufacturing.

However, there are still many loose ends that need to be tied for this plan to be realized. LitioMx does not have a defined budget, yet. Negotiations with mining companies that hold concessions, such as China's Ganfeng Lithium, are still ongoing, as well. Moreover, the Mining Law reform was approved a few weeks ago in a controversial fast-track process and the specific sites where LitioMX will begin its operations have not been determined.

Taddei has pointed out that private companies will be able to join the Mexican lithium industry by partnering with the company. However, the government will still exercise control over the projects. "There is no doubt that the Mexican government should have control in a strategic association with private companies," said Taddei. As for the percentage that the government wants to own of each project, Taddei stressed this will depend on each deposit.

The key issue is that the federal government still lacks certainty about the amount of lithium in the country and which areas beyond Sonora, where the first lithium reserve has already been declared and can only be exploited by the State, will join the map of potential deposits with suitable characteristics to become producers.

There are rumors that states such as Zacatecas, San Luis Potosi and Baja California have indications of possible lithium deposits, but nothing has been confirmed, yet. Although authorities of Baja California found lithium deposits and expressed their willingness to exploit them, the local Minister of Energy said production in the near future is unachievable since the development process requires time. According to Baja California’s Minister of Energy, Kurt Honold, it is impossible to instantly extract the state’s lithium, as an entire production process needs to be set up first.

Photo by:   Tobias Kleeb

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