Battery Strategy

Mexico is sitting on the world’s largest lithium deposit but thoughts of nationalisation are emerging.

Lithium is growing into an important product for South America as the mineral is an essential component of our battery-powered world – global consumption of Lithium has risen by 8.9 per cent annually.

The ‘Lithium Triangle’, an area covering parts of Argentina, Chile and Bolivia, contains the world’s largest reserves of the mineral in salt basins.

Argentina and Chile have been exporting lithium carbonate for years but Bolivia’s lithium industry has been bogged down by politics and nationalism, in almost the same way that it has failed to profit from its gas reserves.

“It [nationalisation of the lithium sector] is not among Morena’s priorities in the Senate.”

Legislative advisor to the Mexican Senate.

Mexico has also joined the party, announcing that the Sonora lithium project could be sitting on the world’s largest lithium deposit in rock. Bacanora Lithium of Canada and China’s Ganfeng Lithium are already at work on an exploitation project. Bacanora Lithium has stated that the project is so profitable that the company will stay in Mexico for the next three centuries. Mining in Latin America is not easy though.

A group of Senators from the ruling Morena party have included a proposal to nationalise lithium as a strategic resource on their agenda for the next legislative period. Furthermore, last week, AMLO launched the dissolution of a dozen undersecretaries, including that of mining, in a bid to reduce public spending.

“The creation of a parastatal entity has little, if not, zero probability of passing.”

Legislative advisor to the Mexican Senate.

On the surface this is concerning, but what is the reality on the ground?
A legislative advisor to the Mexican Senate does not see a significant risk from the recent developments, “The proposal by Senator Armenta and other Morena legislators is in a personal capacity, there has been no support from the parliamentary group or support from the Presidency, as such it is not among Morena’s priorities in the Senate.

Above all, the proposal for the creation of a parastatal entity has little, if not, zero probability of passing. There are clear instructions to keep the budget available for priority projects and to maintain the essential governance structures.”

For now, it seems the Senate’s priorities are focussed on PEMEX and CFE but the 2021 legislative elections loom. Watch this space!

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