Mexico’s left-wing party has suspended plans to nationalize lithium production and is now trying to welcome private investors to help develop the country’s potential in the metal used to make batteries, the lawmaker behind the proposal told Reuters.
In Mexico, a major producer of copper and silver, there is a large potential for lithium reserves, which are used in electric vehicle (EV) batteries. Most are in hard-to-knock clay deposits, which make mine expensive and technically difficult.
After declaring the possibility of a state lithium monopoly last year, Sen. Alejandro Armenta, chairman of the chamber’s finance committee and key ally of President Andres Manuel Lopez Obrador, said he would instead draft a bill to promote the regulated market in the emerging sector.
“We are convinced that we need private investment and that we are allies of domestic investors as well as foreign investors who respect us,” said Armenta, who attributed his new stance to the study of lithium regulatory frameworks in other countries.
Armenta said the market-friendly lithium bill will be unveiled in September with the start of a new legislative session following the June 6 midterm elections.
The Mexican nationalist president, who is in favor of state-centered oil and energy markets, said in March that his government was considering increasing its stake in lithium. He did not go into details.
In recent weeks, a more pleasant message for business has emerged among officials and candidates of the ruling National Regeneration Movement (MORENA) following Lopez Obrador’s clashes with business elites.
Economy Minister Tatiana Clouthier told local radio last month that the government was looking into public-private partnerships to develop lithium. He suggested that the state could have a 51% stake. Arment says he is still going back.
In the energy sector, private oil companies have mostly done business with the national oil giant Giant Pemex if the state-owned company conducts operations and it is not clear whether lithium investors will react similarly.
Trapped in the clay
Demand for ultra-light metal has exacerbated the global mix to secure supplies, driven by a wave of new electric cars planned for the mid-decade like General Motors and Ford.
The development of lithium wealth in Mexico may help to diversify the global sources currently accumulated in some countries, led by Australia and Chile.
Lithium producers have sought to aggressively increase output. Leading producer Albemarle has doubled its capacity this year and has not. 2 SQM expects lithium carbonate volumes to grow by more than 70% in 2021.
Lithium is formed from brine, usually found in South America, or from hard rock spodumene, usually Australian, through proven extraction technologies, limited to salt evaporation ponds and traditional ore processing.
Lithium-rich brine deposits account for about three-quarters of global production and the rest is rock mining.
The Mexican deposits found so far, however, are mostly trapped in clay soils.
Therefore, due to this distribution, it is not enough in the face of the potential of the former executive director of silver Miner Peñoles, Fernando Alanis, to turn Mexico into a new lithium site.
“Unfortunately, Mexico’s potential doesn’t really exist because there is no commercial process to remove lithium clays,” said Alanis, whose role as president of the Mexican Chamber of Mining is usually a cheerful industry.
Several lithium clay projects are being developed elsewhere, including the Nevada project of Lithium Americas Corp.. The company said it is confident it will be able to extract lithium from clay through a process that performs acid leaching.
Top Mexican prospector Bacanora Lithium, which has four concessions north of Sonora, said it is closest to starting production. In 2018, it planned to release 17,500 tons of lithium carbonate by 2020.
The goal has been pushed back, and the company’s current policy is that production will begin in 2023 and reach 35,000 tons annually. If successful, his only project would be to become Mexico’s largest producer.
World production was about 82,000 tons last year, according to the U.S. Geological Survey.
Bacanora’s delay has not slowed the bet that London-listed shares rose 30% in early May (May 6) after China’s Ganfeng Lithium, a battery maker and main supplier to Tesla, offered to take over the company.
Bacanora declined to comment on how Sonora would process the clay-based lithium tank or his opinion on Armenta’s new legislative proposal.
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