Why AMLO is so interested in lithium; it could be an advantage over the T-MEC

Some Canadian mining companies have shown interest in detecting deposits of this mineral in Mexico

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President Andrés Manuel López Obrador seeks to give the Mexican State the exclusive power to exploit lithium and deny mining concessions to private companies on the grounds of labeling it as a strategic resource for the government.

The electricity reform initiative, which will be discussed and voted on next Sunday, April 17 in the Chamber of Deputies, calls for a state-owned company to extract, process and market this mineral, which is called white gold, according to some energy experts.

After the approval of his Electric Law bill was put on hold when its discussion (by his own party) was postponed, López Obrador said that lithium is a mineral that is important for Mexico's development as an independent nation and for that reason, “it should not be given to individuals, much less to foreigners”.

The Federal Executive stressed that if this change to the Constitution is not approved, the next day it will send an initiative to reform the Mining Law to ensure control over this resource.

Planta automotriz en San José Chiapa, en el estado mexicano de Puebla. EFE/Hugo Ortuño/Archivo
Planta automotriz en San José Chiapa, en el estado mexicano de Puebla. EFE/Hugo Ortuño/Archivo EFE

Because the automotive industry is one of the cornerstones in the Free Trade Agreement between Mexico, the United States and Canada, our country could have a relevant position in the supply chain, particularly in the manufacture of batteries.

One of the main objectives of the trade agreement is to boost economic growth in the region, so at least 75% of the components must be produced in any of the three countries. In addition to the skilled workforce it has, Mexico could increase its share in the production chain thanks to this mineral.

According to the plans of companies such as Ford, General Motors, BMW, Mercedes Benz, and many others, by 2030 most cars will move thanks to rechargeable batteries, which is why lithium extraction will be a highly profitable business, according to financial consultants.

It is known that a Tesla car, model S, uses an energy reservoir composed of at least 12 kilograms of lithium.

FILE PHOTO: Tesla Motors CEO Elon Musk speaks next to the company's newest Model S during the Model S Beta Event held at the Tesla factory in Fremont, California October 1, 2011.   REUTERS/Stephen Lam/File Photo
FILE PHOTO: Tesla Motors CEO Elon Musk speaks next to the company's newest Model S during the Model S Beta Event held at the Tesla factory in Fremont, California October 1, 2011. REUTERS/Stephen Lam/File PhotoREUTERS

Due to the strong demand for this matter, the President of the United States, Joe Biden said this year that he will use the Defense Production Act to boost the production of minerals required by the automotive industry.

Currently, the Mining Law does not establish any particular regulation on so-called white gold and only mentions it once in article 4.

The following are minerals or substances that in veins, mantles, masses or deposits constitute deposits other than the components of the land:

I. Minerals or substances from which antimony, arsenic, barium, beryllium, bismuth, boron, bromine, cadmium, cesium, cobalt, copper, chromium, scandium, tin, strontium, fluorine, phosphorus, gallium, germanium, hafnium, iron, indium, iridium, yttrium, lanthanides, lithium, magnesium, manganese, mercury, are extracted, molybdenum, niobium, nickel, gold, osmium, palladium, silver, platinum, lead, potassium, rhenium, rhodium, rubidium, ruthenium, selenium, sodium, thallium, tantalum, tellurium, titanium, tungsten, vanadium, zinc,

Currently, the countries with the highest production of this element are Australia and Chile. In the case of Mexico, it is believed to have potentially large deposits, however there is currently no commercial production in the country.

One of the main operations that this industry has on Mexican lands is located in the state of Sonora, where the company Bacanora Lithium holds four concessions. E

This foreign consortium had a major extraction planned for 2021, however, after some tests it delayed the plans until 2023.

Some Canadian mining companies have also shown interest in detecting lithium deposits in northern Mexico to develop projector exploitation projects.

Despite the high expectations of the Mexican government, in 2020 the then Economy Secretariat, Graciela Márquez, revealed to the Senate of the Republic that contrary to what was estimated, Mexico had no proven large reserves and clarified that large clay deposits had few quantities of this mineral.

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