Mexico Has Lithium Technology; Costs Still Uncertain: Sheinbaum

President Claudia Sheinbaum confirmed that Mexico already has the technology to extract lithium, but she stressed that high operational costs are still under review. Experts also warn that structural and regulatory challenges are slowing the country’s progress in a global market rapidly racing to meet growing lithium demand.

At her morning press conference, Sheinbaum highlighted Mexico’s significant mineral resources, including lithium, primarily in clay form, which complicates extraction and increases costs. “We do have the technology to extract lithium,” Sheinbaum explained. “The challenge lies in evaluating the cost of processing lithium from clay, essentially a mud-like substance mixed with lithium, which is much more difficult than extracting it from sandy deposits.”

Sheinbaum emphasized that lithium and other critical minerals are essential inputs for a wide range of technologies. “Lithium is considered a critical material. These critical minerals or rare earth elements are vital for renewable energy technologies, including batteries, wind turbines, photovoltaic panels, and EVs. These materials are indispensable,” she said.

Sheinbaum also pointed out that rising global protectionism and trade restrictions, including tariffs imposed by US President Donald Trump, have amplified the strategic importance of these materials. Countries securing reliable access to critical minerals are gaining advantages in rapidly growing sectors such as renewable energy and electric mobility.

Structural and Regulatory Challenges in Mexico

Despite being declared a strategic resource, Mexico’s lithium sector faces major obstacles. Rubén del Pozo, President, AIMMGM, highlighted the underfunding and limited technical expertise of LitioMx, the state-owned entity tasked with developing the country’s lithium industry.

“Lithium is not something you can simply extract and sell for profit,” Del Pozo explained. “First, you need to know where it is, how much of it exists, and in what condition. That requires time, investment, and technology.” He questioned whether a state-run entity alone could conduct exploration processes that typically demand multi-million-dollar investments and extended timelines, especially given Mexico’s limited geological knowledge of lithium deposits.

Funding limitations compound the issue. For the third consecutive year, LitioMx’s budget only covers operational costs, including salaries and administration, preventing the advancement of major projects. The 2026 Federal Budget allocates MX$13.9 million (US$805,000) to LitioMx, a modest 7.7% increase from the MX$12.9 million in 2025, which itself followed a 27.3% increase over 2024’s MX$9.8 million.

Another point of criticism regarding Mexico’s progress in lithium development concerns the involvement of the state-owned oil company, PEMEX. The company is exploring lithium extraction from oilfield brines as part of its efforts to diversify operations and support the country’s energy transition. Last year, CEO Victor Rodríguez disclosed in PEMEX’s 2025–2030 Strategic Plan that lithium concentrations comparable to those in Bolivia have been identified at drilling sites across five states.

As  a result, it was announced that PEMEX is evaluating direct lithium extraction (DLE) technologies to process the metal into carbonate or hydroxide, which are critical for batteries and clean energy applications. The company may establish a subsidiary, PEMEX Lithium, to produce “petrolithium” from petroleum brines, aligning with President Sheinbaum’s push for energy diversification and resource sovereignty.

This initiative could enable collaboration with LitioMx and mirrors global trends in which major oil companies invest in lithium to future-proof operations. However, challenges for PEMEX include limited mining experience, technical difficulties in extracting lithium from clay-rich deposits, and compliance with sustainability standards. 

Current State of Mexico’s Lithium Reserves

Despite structural and regulatory hurdles, Mexico’s lithium potential is considerable. The country holds roughly 1.7Mt of lithium across 82 identified deposits in 18 states. Sonora leads with 13 deposits, followed by Puebla (12) and Oaxaca (9). Analysts contend that with sufficient investment and technical capacity, Mexico could emerge as a meaningful player in the global lithium market.

However, Mexico lags behind competitors such as Chile, Bolivia, and Australia, which are consolidating their positions in the lithium sector. “While Mexico debates state control of lithium, the global automotive industry is already securing supply contracts elsewhere, leaving the country out of the investment race for batteries and electric vehicles,” said Armando Alatorre, Vice President, CIMMGM.

Global Lithium Market Outlook 2026

The global lithium market is tightening as demand grows faster than supply. S&P Global Energy CERA projects the lithium carbonate surplus will fall to 109,000mt in 2026, down from 141,000 mt in 2025. Global consumption is expected to rise 13.5% to 1.48 million mt LCE, while production will increase 9.9% to 1.58 million mt LCE. Energy storage is now the main driver of lithium demand. The battery energy storage system (BESS) market, which gained momentum in late 2025, is expected to expand 7.7% in 2026, reaching 301GWh of new installations. China remains the largest contributor, though recent policy changes may slow growth.

EVs continue to boost lithium consumption. Global sales of plug-in hybrid EVs are expected to reach 22.77 million units in 2026, a 16.8% increase from 2025. Heavy-duty electric trucks are growing even faster. In China, sales rose 190.6% through November 2025, and the global share of new energy heavy trucks is expected to exceed 30% by 2026.

Supply is projected to grow 10% to 1.63 million mt LCE, despite disruptions at China’s CATL Jianxiawo mine and issues in Nigeria, a key spodumene exporter. High lithium prices may encourage idle operations in Australia and some African projects to restart, though delays are possible due to logistical and regulatory challenges.

To date, the global lithium market is dominated by China, Australia, and Chile, followed by Argentina and Bolivia. While Australia leads in raw lithium production, China controls the largest share of processed lithium and lithium chemicals, making it the most influential player in the global supply chain. Together, these five countries supply roughly 94% of the world’s lithium used in batteries, electric vehicles, and renewable energy.