Mexico Eyes State-Owned Lithium Company; Seeks to Cancel Permits of an Existing Chinese Mining Company

Mexico President announced Wednesday that he will establish a state-owned company to mine lithium, implying to cancel one of the few existing permits held by a Chinese mining company.

President Andrés Manuel López Obrador has long stated its desire to place the country's lithium and other natural resources under state control, and he plans to do so through an energy reform that is currently awaiting congressional approval.

According to Lopez Obrador in a daily press conference, they do not want lithium to be handled by foreign powers: the United States, China, or Russia.

"The lithium belongs to Mexicans," AMLO added, per Fronteras.

Lithium As "Strategic Mineral"

In October, the leftist president stated that he intends to declare lithium a "strategic mineral," as well as reserve future exploration and mining for the government, Seattle Times reported.

It was unclear whether he would rely on private companies to finish the work, which Mexico has no experience with. However, López Obrador said on Wednesday that the mining and processing will be handled by a newly formed government company.

He also stated that a private lithium mine owned by a Chinese company in the northern state of Sonora would not be permitted to start production.

"What they want to do is to continue looting and that is over," López Obrador said, "...we are going to take legal steps."

When asked specifically if this meant the mine would be forced to close, López Obrador clarified that lithium will be "mined by the government."

Mexico Hoping To Produce 35,000 Tons of Lithium

Interior Secretary Adán López Hernández stated in October that the eight mining concessions already granted in Mexico would be respected as long as they were well on their way to producing the metal.

According to López Hernández, only one private mining company met those requirements at the time.

Though he did not name the mine, he appeared to be referring to Bacanora Lithium, Mexico's only viable private lithium mine.

The project, Bacanora Lithium, hopes to produce 35,000 tons of lithium annually beginning in 2023.

The president suggested that the concession was illegally granted by a previous administration, and "this warrants an investigation into who gave these permits, this authorization."

Declaring lithium a "strategic mineral" as reserved for the state, still, must be adopted.

The change is contained in legislation sent to Congress by López Obrador, which would also amend Mexico's constitution to strengthen government control over electricity production and distribution.

A two-thirds majority in both houses of Congress and a majority in state legislatures are required.

The bill would eliminate much of the framework for private-sector openings in Mexico's electrical power market, going to guarantee the state-owned utility a majority market share and allowing it to buy power from private plants if so intended.

Mexican lawmakers are set to vote on the president's energy reform in April.

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Written by: Jess Smith

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