State Seeks to Have Exclusive Control of Lithium ReservesBy Paloma Duran | Wed, 10/06/2021 - 07:30
The electricity reform that seeks to strengthen the CFE and grant it more than50 percent of the market share has been sent to congress. If approved, the reform would also give the state exclusive control of the country's lithium reserves, while private companies could lose their concessions if they do not meet the new criteria.
President López Obrador has sent the electricity reform that seeks to guarantee energy security in the country and control costs by handing 56 percent of the country's energy market to the CFE, while 46 percent will go to the private sector. Previously, the president said that he was considering including the issue of lithium in the reform so that the country could begin to take advantage of this precious resource.
Last week, López Obrador confirmed that the electricity reform includes the issue of lithium so that the state could have exclusive control. “The technological and modern industry will not be able to develop without lithium. Mexico has sufficient lithium reserves and this will allow us to promote this resource for the development of Mexico. That is why we made the decision that lithium belongs to the Mexicans and only to Mexicans."
The reform seeks to stop granting concessions on strategic minerals, such as lithium, giving the state the exclusive right to exploit and produce the metal. The Ministry of Interior explained that the concessions that have already been granted for other minerals such as gold, silver and copper will be maintained, but cannot be used for lithium.
Regarding the eight lithium concessions that have already been granted, López Obrador said that they will remain in force if they demonstrate to the CFE and the Ministry of Energy that they are already exploring and seeking to start production. The president said that of the eight concessionaires, only one meets the necessary characteristics to maintain the concession. However, it did not provide further details of the concessions or companies.
Experts believe that the reform could lead to the creation of a new state company in charge of exploring, exploiting and producing lithium, and that together with the CFE and PEMEX it will give the government control of the country's critical resources. However, the Mexican government will still need third parties to acquire more knowledge, infrastructure and technology to exploit the deposits, an expert who requested anonymity told Expansión.
Mexico ranks ninth in the world among countries with the largest lithium reserves with 1.7 million tons, according to the US Geological Survey. The country is expected to benefit from lithium demand; however, its reserves are located in hard-to-extract clay deposits, which makes its production expensive and unprofitable, said CAMIMEX.
Currently, the country has 36 lithium projects, which are financed and controlled by 10 foreign companies, which are 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 3 have advanced their projects: Bacanora, Organimax and One World Lithium.