Previously Granted Lithium Contracts Will Be Respected: AMLO

The Mexican government announced that lithium concessions and contracts aimed at exploitation will be respected if they comply with the country’s regulation. In addition, he announced that although the state will have exclusive control over the exploitation of lithium, private sector participation is not ruled out.

During his morning press conference, President López Obrador announced that the previously-granted concessions will be reviewed to see if they were requested for the exploitation of lithium or minerals in general. In case the request specifies lithium, the contracts and concessions will be respected.

“The contracts that were previously agreed to will be reviewed to see if they were requested to exploit lithium. If [companies] applied to exploit lithium, respect the law and have an exploration and production project, the contracts will not be cancelled. However, there will no longer be [new] concessions for lithium. Everything will be directed by the new state lithium company,” López Obrador said.

The president also stressed that the Sonora Litium project, under development by Bacanora Lithium and Ganfeng Lithium, will be treated no differently. Previously, López Obrador said the project would certainly be reviewed, as the Federal Economic Competition Commission (COFECE) authorized Ganfeng Lithium’s takeover of Sonora Lithium. COFECE's go-ahead was strongly criticized by the president, but the competition watchdog said it greenlighted the move because it did not represent any risk to competitors or consumers.

Additionally, López Obrador stressed that although the reform to the Mining Law established that only the State can exploit lithium, the government is not wholly opposed to working with private companies. The news is encouraging, as private companies, mining chamber CAMIMEX and industry experts have warned that the administration will not be able to take advantage of the resource's opportunities for up to 13 years, because the public sector lacks the knowledge, experience and technology to exploit the mineral.

Currently, Mexico has 36 lithium projects under control by 10 foreign companies, including Organimax Nutient, Bacanora Lithium, One World Lithium, Radius Gold, Infinite Lithium, Rock Tech Lithium, Alien Metals, Zenith Minerals, Lithium Mex, Pan American Lithium and ZEOX. Of all the companies, only three have advanced their projects from the greenfield stages: Bacanora, Organimax and One World Lithium have already made decent progress, according to an Expansión report. The 36 projects cover 97,000ha. However, there are other projects that were previously under review,  covering 537,000ha, equivalent to 84 percent of the concessions associated with lithium. These new projects are expected to become paralyzed due to Mining Law’s reform, however.