Mexico turns to private sector to expand lithium mining
The ruling Morena party no longer seeks to nationalize lithium mining and will instead encourage private investors to help develop Mexico’s potential to produce the sought-after ultralight metal.
Mexico has large potential reserves of lithium, which is used in a range of batteries, including those that power electric vehicles, but most of it is found in clay deposits that are technically difficult and expensive to mine.
Morena Senator Alejandro Armenta, head of the Senate Finance Committee and a close ally of President López Obrador, said late last year that the government could establish a state monopoly on lithium. But in an interview with Reuters news agency this week, he said he would draft a bill promoting a regulated market for lithium mining.
“We are convinced that we need private investment, and we are allies of domestic investors and also of foreign investors who respect us,” Armenta said.
The lawmaker told Reuters his new position was the result of studying regulatory frameworks for lithium in other countries.
A market-friendly lithium bill will be presented to Congress at the start of the new sitting period in September, he said, when the composition of the lower house changes following Sunday’s election.
López Obrador, who is pushing for increased state control over the oil and electricity markets after the previous government opened them up to private and foreign companies, said in March his administration was exploring the possibility of taking a larger stake in nascent lithium. sector.
But Economy Minister Tatiana Clouthier said in a radio interview last month that the government was considering a public-private partnership, suggesting the state could seek a 51% stake in the sector, which is centered on the northern state of Sonora.
Armenta told Reuters he supported such an arrangement.
The news agency noted that the big oil companies were mostly reluctant to enter into joint ventures with Pemex if the state oil company was responsible for operations.
“It was not clear whether lithium investors would react in the same way,” Reuters said.
He also said that developing Mexico’s lithium potential could help diversify sources of the metal, for which demand is growing, as automakers such as General Motors and Ford plan to make new electric vehicles later this decade. . Lithium production is currently concentrated in a small number of countries led by Chile and Australia.
However, the extraction of lithium in Mexico poses significant challenges. Reuters said about three-quarters of global production comes from lithium-rich salt brines, while the rest is mined through rock mining.
However, in Mexico, most of the lithium deposits located to date are trapped in clay soils. The former federal Minister of the Environment, Víctor Manuel Toledo, affirmed at the end of 2019 that lithium would be the “new oil” of Mexico, as its reserves are immense.
But Fernando Alanís, former CEO of the large silver mine Peñoles and president of the Mexican Chamber of Mines, does not share his optimism.
“Unfortunately, the potential in Mexico doesn’t really exist because there is no business process to remove lithium from clays,” he said.
However, several lithium projects are in development, Reuters noted. Lithium Americas Corp, which has a project in Nevada, said it was confident it could mine the metal using a process involving acid leaching.
Three years ago, Bacanora Lithium, which has four concessions in Sonora, forecast production of 17,500 tonnes of lithium carbonate by 2020. However, the company – which has not disclosed how it intends to extract the lithium – did not start production. He now plans to start mining in 2023 and eventually increase production to 35,000 tonnes per year. If it achieves that goal, Mexico would be catapulted to “major producer status,” Reuters said.
Such a quantity would have represented 43% of the world production last year, which was 82,000 tons, according to the United States Geological Survey.
It is not yet clear whether Mexico will become a major lithium producer and reap the economic benefits. But the potential for a windfall seems high, and the government – while willing to partner with private companies to harness their expertise – seems determined to carve out the lion’s share of the profits.
Source: Reuters (Fr)