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News Article

Private Sector Will Be Needed to Exploit Lithium: COPARMEX

By Paloma Duran | Thu, 10/28/2021 - 15:01

If Congress approves President López Obrador’s constitutional reform to maintain the exploitation of lithium in the exclusive control of the government, the latter will have to subcontract private companies to obtain the mineral since it does not have the technology, resources and experience to boost the industry alone, said COPARMEX.

“The government does not have the infrastructure, so it is very likely that it will hire private companies to exploit the lithium. In the end, the State will have to turn to them, whether Mexican or foreign, to make the most of the industry,” Carlos Aurelio Hernández, Vice President of Renewable Energies of the National Energy Commission, COPARMEX, told El Heraldo de México.

Private companies hired will be those that have the best available technology to avoid affecting the environment, especially in the use of strategic resources such as water and the care of nearby ecosystems, he added.

Regarding the government's announcement that some concessions could be withdrawn, José Medina, President, COPARMEX, said that the lithium reform is considered high risk for national and international investors as it does not consider current contracts. Medina explained that if the government seeks to have greater control of the lithium industry without having legal problems, the best thing would be to stop giving lithium concessions, but respect those that have already been granted. "If the government respects the contracts that are already in place, even though there would be no new contracts, that would send a very different message to investors."

Kurt Gerhard López Portillo, President, COPARMEX Sonora Norte, said that the most prosperous countries are those where the State is dedicated to governing efficiently, while industries do business. Likewise, he stressed that monopolizing a resource that is still new and that lacks certainty regarding its long term profitability can be counterproductive. “We cannot govern by conjunctures. Lithium is an efficient product for batteries but there are also more efficient batteries based on graphene. Technologies are changing, we cannot make public or long-term policies with conjunctures. Perhaps now lithium is very important, but maybe in one year, in five or 10, the next technology will stop considering lithium important and the metal will have zero value," he said.

The data used in this article was sourced from:  
El Heraldo de México, sdpnoticias, El Imparcial
Photo by:   Janik
Paloma Duran Paloma Duran Journalist and Industry Analyst