Production of Mexico’s Main Private Lithium Project PostponedBy Paloma Duran | Wed, 04/20/2022 - 05:54
Bacanora Lithium has announced that its first lithium production will be a year later than previously planned. Although the company did not explain the reasons for the delay, experts say that it may be due to the difficulty of exploiting the deposits in Mexico. In addition, industry insiders believe that a reform of the Mining Law could further delay production.
In its latest financial report, Bacanora Lithium announced that its first lithium production from its Sonora Lithium Project is scheduled for 2H24, a year later than expected. This is the second time the company has delayed production of its flagship project: Bacanora originally planned to start production in 2H22. However, this first date was pushed back due to the COVID-19 pandemic.
Even though the company did not provide any explanation for the delay, experts believe it can be due to the difficulty of exploit lithium deposits in Mexico. Because the lithium is found in clay deposits, the resource is exceedingly difficult and expensive to access. Previously, Fernando Alanis, former President of CAMIMEX, explained that Mexico’s lithium has a concentration of only 0.001 percent per tonne. To bring this resource to a battery percentage of 30 percent, both the cost and energy demand would be high.
Additionally, Bacanora announced that Ganfeng Lithium, which will soon acquire the Sonora Lithium project, continues to work with suppliers to meet the new delivery date. In addition, Bacanora announced road construction works have started, while bulk earthmoving works are expected to start in late 2022.
Bacanora's announcement comes at a critical moment for the lithium industry in Mexico. Yesterday, the energy reform, which sought to guarantee state control over lithium, was not approved because it did not reach a qualified majority. Although the news was celebrated by private industry leaders, López Obrador announced that he has sent a new initiative to Congress to nationalize lithium, which is expected to be voted on today. “We were prepared for this betrayal to happen since we knew there were others trying to manipulate the vote. Our Plan B is to change the Mining Law so that lithium does not fall into the hands of private companies,” said the president.
The new reform proposes not to grant concessions and permits to any private company interested in lithium production. Although Bacanora previously stated that López Obrador's reforms would not affect its concessions because the company has already begun exploration work and also complied with all licensing requirements, experts believe that future permits could be denied, making it more difficult to operate.