Mexico plans state lithium company, questions Chinese mine

Feb 2, 2022, 5:31 PM | Updated: 5:48 pm

MEXICO CITY (AP) — Mexico’s president said Wednesday he will create a state-owned company to mine lithium and appeared to suggest he will seek to cancel one of the few existing permits held by a Chinese company.

President Andrés Manuel López Obrador had said in October that he wants to declare lithium a “strategic mineral” and reserve future exploration and mining to the government. Lithium is a key component of batteries.

It hadn’t been clear if he would rely on private companies to do the work, which Mexico has no experience in. But López Obrador said Wednesday that a newly created government company will do the mining and processing.

The president also said a private lithium mine in the northern state of Sonora that involves a Chinese company would not be allowed to start production.

“What they want to do is to continue looting and that is over. We are going to take legal steps,” López Obrador said.

Asked specifically if that meant the mine would be blocked from operating, López Obrador said, “Lithium is going to be mined by the government.”

That operation, Bacanora Lithium, is Mexico’s only viable private lithium mine, and had been expected to start production in 2023. It is currently owned by Chinese lithium giant Ganfeng International.

In October, Interior Secretary Adán López Hernández had said the eight concessions for mining lithium already granted in Mexico would be respected as long as they were well on the way to producing the metal.

López Hernández said at the time that only one private mining company met those criteria. Though he didn’t name the mine, he apparently referred to Bacanora Lithium, a project hoping to produce 35,000 tons of lithium annually starting in 2023.

López Obrador suggested the concession was illegally granted by a previous administration, saying that “this warrants an investigation into who gave these permits, this authorization.”

The declaration of lithium as a “strategic mineral” reserved for the state must still be adopted. The change is contained in legislation that López Obrador has sent to Congress that also would change Mexico’s constitution to strengthen government control over electricity production and distribution. It requires a two-thirds majority in both houses of Congress and a majority of state legislatures.

The bill would eliminate much of the framework of private sector openings in Mexico’s electrical power market, giving the state-owned utility a guarantee majority market share and allowing it to buy power from private plants if it so chooses.

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Mexico plans state lithium company, questions Chinese mine