Mexico City — The government of Mexican President Andrés Manuel López Obrador has less than a month to create a state-owned company in charge of exploiting the country’s lithium resources, following its reform of mining laws that hand the state the control and economic management of the mineral’s value chain.
August 24, 2022 is the deadline set by the presidential decree that ushered in the reform that stipulates the creation of a decentralized public entity in charge of the exploration, exploitation and exclusive harnessing of lithium, a mineral key for the storage of electrical energy and a component of electric vehicle batteries.
“The executive, within 90 working days following the entry into force of the decree, will issue, in accordance with the federal law for state-run entities, the instrument for the creation of the decentralized public entity,” the text of the reform decree reads, and which was published in the Official Gazette (DOF).
AMLO, as the president is known, said in July that the project for the company was ready, but has yet to launch it, adding only that his administration was analyzing the potential name of the company, as some options, such as Agencia Mexicana de Litio (Amlitio) or Litio Mexicano (Litiomex), have already been registered.
“We already have a proposal, the company will belong to the Energy Ministry (Sener),” AMLO said during a July 19 press conference.
Bloomberg Línea consulted Sener and the Finance Ministry regarding the progress of the company’s formation and its budget, but has yet to receive a response.
AMLO sent his proposal to reform the mining law to Congress one d
ay after his initiative to reform the Constitution and hand control of the electricity sector to state-owned utility CFE was rejected by legislators.
AMLO has criticized the granting of lithium mining concessions by past administrations to private companies, which, he says, gave away 120 million hectares (296 million acres).
“60% of Mexico’s territory has been granted in concession,” he said.
Authorities are now analyzing what will happen with the lithium concessions already granted to companies, which include Bacanora Lithium, a British company with Chinese company Gangfeng as an investment partner.
Bacanora owns 10 mining concessions covering 100,000 hectares in the state of Sonora. Seven of them include a lithium deposit with estimated resources of 8.8 million tons of lithium carbonate equivalent for open pit mining with an expected lifespan of 250 years.
“We will review whether the concessions refer to lithium, because if they are not concessions granted for the exploitation of lithium they cannot be recognized; those that were granted for that purpose will be recognized,” AMLO has said.