May 6, 2022
Mexico's lithium nationalization bill approved for implementation
According to the Mining.com website, the Mexican Senate passed the bill proposed by President Obrador for the development of lithium battery metal exclusively for batteries with 87 votes in favor, 20 against and 16 abstentions, officially starting the nationalization of the lithium industry.
The ratification of the law, which went into effect on Thursday, was a record — just two days after Obrador introduced it to Congress.
The bill upgrades lithium to a "strategic mineral" and declares that the state enjoys the exclusive right to explore, develop and utilize lithium resources. In addition, the Act allows the state to specialize in other franchises that are classified as strategic minerals.
The top leader has 90 days to form a new, decentralized agency to handle all lithium-related matters.
Since taking power in 2018, Obrador has sought to reverse resource reforms undertaken by the previous administration that opened the door to private investment in the oil and power industries. He introduced a resource development model that favored state-controlled enterprises.
The president said his authorities would review all lithium contracts, overshadowing projects already in development, including Bacanora Lithium's Sonora project in northwest Mexico. The Sonora lithium mine is expected to be put into operation in 2023, with an annual output of 35,000 tons of lithium.
The bill, considered a violation of the U.S.-Mexico-Canada agreement, could escalate trade tensions between Mexico and its northern neighbor.
Kenneth Smith Ramos, the former head of the technical negotiation team for the defunct North American Free Trade Agreement (NAFTA), told local media that there were problems with declaring lithium as a strategic mineral because it was not listed when the three countries signed the agreement. for strategic minerals.
The Mexican Association of Mining Engineers, Metallurgists and Geologists said in a statement, "Clay-type lithium mines exist in Mexico. But as far as we know, there is currently no country in the world that commercially produces lithium from clay."
Most of the world's lithium production currently has long-term supply agreements, as chemical producers, battery makers and electric vehicle makers look to secure future supplies.
According to the United States Geological Survey (USGS), Mexico has the 10th largest lithium reserves in the world.
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