US Companies Could Help Mexico Produce Cheap Lithium
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US Companies Could Help Mexico Produce Cheap Lithium

Photo by:   Nicole Geri
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Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Tue, 01/17/2023 - 15:45

As the need for green minerals is increasing and nearshoring is shaping the North American economic landscape, the US expressed its desire to help Mexico in improving its lithium production capabilities to produce the key mineral at a lower price.

In an interview with Milenio, Brian Nichols, Undersecretary of State for the Western Hemisphere, said the governments of Mexico, Canada and the US are working closely to exploit the required materials to develop the new generation of batteries. His statement comes amid a context in which USMCA members need to produce as much lithium as possible within the next two years to compete with regions like Asia.

According to Nichols, the US is willing to help Mexico in developing lithium production capabilities since the former country has experienced private companies that can provide technology to make lithium production cheaper. He said that this help can be given while respecting Mexico’s stance toward lithium exploitation. “I understand that, under the Mexican legislation, the state has the exclusive right to exploit lithium. But you will need the private sector to market it, therefore building this kind of association will be important. Besides gaining the technologies that will reduce Mexican lithium costs, it will make Mexico more competitive, not only in our hemisphere but beyond,” he added.

Nichols highlighted that Mexican lithium production costs are higher than the global average. Like other industry leaders, Nichols stressed that lithium in the country is present in clay deposits, an unusual source since most of the world’s lithium is extracted from salt deposits and rocks.

According to the US Government, the USMCA region could become a leading lithium-producing region since it has over 13.7 million t of lithium in different deposits across the subcontinent. The region may not surpass South America but could easily surpass Asia in the production of the mineral.

To properly harness lithium opportunities, Nichols suggests that countries must harmonize their regulations. According to Nichols, car manufacturers are interested in expanding electric vehicle production to Mexico. However, they require clean energy sources to promote their cars as true reduced-emission vehicles. Recently, Tesla announced the construction of an assembly plant in Nuevo Leon and General Motors reported the transformation of its Ramos Arizpe plant into an electric vehicle assembling plant and Volkswagen said it could start the production of electric cars at its plant in Puebla by the end of 2024. These changes in the automotive industry will exponentially increase the lithium demand in Mexico.

Despite worldwide efforts to develop stronger lithium extraction operations, the Australian Government’s Department of Industry, Science and Resources (DISER) says that it could be challenging to meet the demand since the industry is increasing the demand for lithium, which increases the possibility of supply shortages in the next few years. 
 

Photo by:   Nicole Geri

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