It is a mistake to say that lithium is the country's new oil, since Mexico does not have large confirmed lithium reserves and the mineral does not produce energy. Furthermore, the country’s potential regarding this resource is only average, said Armando Torres, President of the College of Engineers, Metallurgists and Geologists of Mines of Mexico (CIMMGM).
Torres explained that there has been a lot of misinformation about the country's lithium reserves and potential, as the data provided to the public is not accurate. Mexico does not have the high potential it has been touted because the country does not have the largest deposit in the world, said Torres. In addition, he emphasized that it is incorrect to say that lithium is the new oil, since the mineral does not generate energy but rather stores it.
Torres said that President López Obrador's electricity reform is worrying, especially given the initiative to nationalize lithium. In addition, he explained that the uncertainty generated around the future of other strategic minerals that may also fall in the hands of the government is another great threat to the industry since he considers that there are around 50 minerals that could be considered in this category.
It would be better if the government only focused on tax collection, leaving lithium exploration and extraction to the private sector, as the government does not have the financial resources to carry out these mining activities, Torres said. "The first question is where the government is going to get the millions needed for exploration. In addition, it does not have the investment capacity to be able to bring this into production."
Pablo Méndez, President of CLUMIN, explained in a MBN Expert Opinion piece that the Mexican lithium deposits must be exploited through highly specialized processes. As of today, the country lacks the appropriate technology to conduct their extraction. “Its nationalization would mean that Mexican lithium can neither be exploited nor used, and consequently, Mexico will not be able to stand out as one of the world’s principal lithium extractors.”
Torres stressed that it is not yet clear if the government is going to create a state company for the exploitation of lithium or how it plans to tackle this sector. Recently, the Ministry of Energy, Rocìo Nahle, announced the creation of a state company for the exploration and exploitation of lithium. However, no further information has been provided. While there is still a lot of uncertainty about whether the electricity reform will be approved, Torres highlights that six other initiatives have already been made to nationalize lithium. However, these only entered Congress and were reviewed.