Mining Reform Can Delay Lithium Operations Up to Five Years
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Mining Reform Can Delay Lithium Operations Up to Five Years

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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Wed, 02/08/2023 - 15:23

The reform to the mining law of April 2022 reserved all exploration, exploitation and management activities of lithium to the government, leaving 37 concessions awarded to private companies in uncertainty. Consequently, the operation of the first deposits can be postponed for up to five years, fear industry insiders.

Experts point out that the reform will cause a loss of investments and that the country will lag behind in entering value chains where the mineral is used such as the automotive and technology industries.

Armando Ernesto Alatorre, President, CIMMGM, explained that the big issue with the reform is that it does not stipulate what will happen with the previously granted concessions. Alatorre wrote for MBN that there are several misconceptions in the regardingegard to lithium. One such falsehood is that concessions are being used by Chinese, British and Canadian corporations. He also clarified that today, not a single mine or company is producing any lithium in the country.

The most important concession was granted to Bacanora Lithium, an arm of the Chinese company Gangfeng. The deposit is located in Bacadehuachi, Sonora, and is expected to have reserves of up to 243 million t. Nonetheless, Bacadehuachi is not the largest in the world: to classify a deposit by its size, a combination of tonnage and grade percentage must be considered, explained Alatorre.

“Although 243.8 million t might sound like a huge number, what is not said is that the grade is only 0.348% lithium. Just for comparison, the main Chilean salt depósit has twice as much percentage and the Jadar deposit in Serbia contains 1.8 percent lithium,” he said.

Furthermore, Alatorre mentioned that information to exploit the mineral in the first stage is present because the Chinese company has invested around US$420 million already. However, legal uncertainty prevails due to the lack of clarification in the reform regarding previous concessions.

“Now, there is nothing clear about how companies will work, if their concession will be canceled or if they will be able to keep operating. They are in a legal limbo that is not good for Mexico and are waiting to see how the government moves before turning to legal entities to see if their investment and licenses will be respected,” said Alatorre. 

Photo by:   Deon Hua

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