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News Article

Will the Lithium Reform Be Presented This Week?

By Paloma Duran | Tue, 09/28/2021 - 11:04

The lithium reform that seeks to establish a reliable framework to exploit the resource in the best possible manner could be included in the electricity reform, which is scheduled to be presented to congress this week, said President López Obrador.

The electric reform that seeks to strengthen state company CFE is expected to be sent to congress this week. López Obrador said that the exploitation of lithium could be added to the reform so that the country begins to take advantage of the resource. However, the government is still pondering what is better. “We are analyzing whether to include the lithium issue or to do it separately. We want to choose the best option. As a result, we are studying the entire resource and want to come up with a good framework and even see if we can nationalize the resource,” said López Obrador.

Regarding the nationalization of the resource, the president said that it is still being studied. However, he stressed that the government is aware that some companies are already working with the resource in Mexico and is not seeking to remove these concessions. “The issue concerning the nationalization of lithium is being studied by the Ministry of the Economy. We will continue to review what possibilities exist to develop them, but first we are studying its potential. In regards to companies that are already working on this, we do not seek to expropriate. Since the beginning of my government, we have not made any expropriations.”

In February, MORENA, the president´s party, announced its intentions to introduce to the senate an initiative that would nationalize the country's lithium production. The spirit behind MORENA’s initiative to nationalize lithium was to strengthen Mexico’s sovereignty and consolidate its position in the international arena. A month after the initiative's announcement, López Obrador said the government was planning to have a greater stake in lithium production, because other companies are not using mining concessions correctly.

In April, MORENA announced that it was no longer seeking to nationalize lithium production in Mexico and called on the private sector and investors to help the government boost the country’s lithium potential. MORENA’s Senator Alejandro Armenta Mier, told Reuters that instead of nationalizing the new resource, a bill to regulate the lithium market in Mexico would be promoted in September with the newly legislative session. In addition, Armenta explained that the government has understood that in order to make the most of lithium, Mexico needs the private sector. “We are allies of domestic investors and foreign investors who respect us."

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.

The data used in this article was sourced from:  
Gobierno de México, Milenio, MBN
Photo by:   Finnrich
Paloma Duran Paloma Duran Journalist and Industry Analyst