Mexico founds state firm to extract and process lithium
The Mexican government has founded a state-owned company to extract and market lithium. According to a decree by President Andrés Manuel López Obrador, the raw material is to be produced and distributed exclusively by Litio para México. The company aims to start operations in six months at the latest.
The company is called Litio para Mexico, which translates as “Lithium for Mexico”, and is to operate independently of the energy ministry, according to information from the German dpa news agency. Reuters reports – with reference to the decree – that the new head of the company will be proposed by the energy minister and appointed by the president. According to the decree, the energy minister, the finance minister, the economy minister, the interior minister and the environment minister will also sit on the company’s board.
Mining laws were reformed in Mexico earlier this year. Now only the state can explore, mine and sell lithium deposits. Although no lithium is mined in the country yet, according to reports, a number of agreements have already been concluded. Lopez Obrador declared in April that all contracts would be reviewed.
For the battery industry and the electric mobility sector, lithium extraction in Mexico would be potentially interesting against the backdrop of the new US regulations: since Mexico, Canada and the US are linked via the NAFTA free trade agreement, battery raw materials mined in Mexico and Canada would also meet the new US requirements for the EV tax credit. Against this background, Volkswagen and Mercedes-Benz have this week also concluded memoranda of understanding with the Canadian government to secure access to battery raw materials from the country.
Mexico is already revving up for electric mobility. The country is home to a Volkswagen plant which is currently being converted to produce electric vehicles, a plant from General Motors, which is similarly in the process of transitioning to electric vehicles, while the same is rumoured to be the case for the existing BMW plant in the country. While this does not necessarily mean batteries will be made in the country, last year, battery maker Freyr said it was considering opening a battery plant in Mexico. Of course, lithium mined can be directly exported without necessarily being used in the country, but more countries are increasingly looking at using their raw materials to stimulate their own industrial activities, such as Indonesia, with its large nickel deposits.
Although Mexico’s new decree states that Litio para Mexico may work with either public or private institutions to mine lithium, there has been considerable blowback from business groups. Some are saying the nationalisation of lithium could set off a constitutional dispute.