Mexico nationalises lithium industry, labelling it a ‘strategic mineral’

The Mexican Senate has approved a bill to nationalise its lithium industry, in a move that casts doubt over a handful of lithium development projects currently owned by foreign investment companies.

The law, proposed by President Andrés Manuel López Obrador, elevates lithium to the category of ‘strategic mineral’, declaring the exploration, exploitation, and use of lithium to be the exclusive right of the state.

The executive must now create a new decentralised body in the next three months to deal with all lithium-related matters.

Since taking power in 2018, López Obrador has sought to reverse previous government reforms which encouraged privatisation, while pushing a resource exploitation model that gives priority to state-controlled companies.

Last year, Mexico rose several places to number three on global risk and consultancy firm Verisk Maplecroft’s Resource Nationalism Index (RNI).

The President said his administration will review all lithium contracts, including Bacanora Lithium’s in Mexico’s Northwest. The London-listed company, owned by China’s Ganfeng Lithium, is developing the large-scale Sonora project, which is slated to produce 35,000 tonnes of lithium per year starting in 2023.

Data from the US Geological Survey shows that Mexico’s reserves of the in-demand metal positions it in the 10th place among the world’s top producers.

@RGNonline