Mexico is so far a minor player in the lithium market – in Argentina, the proven quantities of the raw material are around 19 million tons.
(Photo: Reuters)
Mexico City Mexico’s President Andrés Manuel López Obrador is not a fan of renewable energies. Although there is plenty of wind and sun in the second largest country in Latin America, the corresponding state support is very poor. López Obrador, an old leftist with ideas from the 1980s, backs oil and its extraction.
Billions are pouring into refinery construction and crude oil reserves, while renewable energy reform legislation is being rolled back and private investment crowded out. Because in Mexico, national pride comes before climate protection. To a certain extent, this also applies to the “white gold” – lithium.
For one thing, the oil and national reserves in the second largest country in the world are a matter of sovereignty – at least according to politicians. And so the raw material must be in the hands of the state and have priority over all other energy sources.
The current raw material crisis caused by the Ukraine war and the associated high prices seem to prove López Obrador and other similarly thinking rulers right.
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Above all, the president is extremely reluctant to see foreigners getting involved in the Mexican energy market. He accuses them of greed and a culture of corruption. López Obrador lectured that the white gold awakens “ambition among the great powers and big industry” because it is a strategic mineral for the development of the future. And so lithium continued what he had started with oil and power.
Lithium is not yet mined in Mexico
In late April, Mexico’s Congress passed legislation prohibiting the granting of concessions to private companies for lithium mining. In future, the raw material that is essential for electric cars may only be mined and sold by government agencies in Mexico.
Mexico’s President Andrés Manuel López Obrador is not a fan of renewable energies.
(Photo: imago images/Agencia EFE)
No lithium is mined in the country yet. However, a number of concessions have already been awarded, most of which have not yet been used. The government wants to review all contracts and terminate them if necessary. The most advanced project is operated by the Chinese company Ganfeng-Lithium in the northern state of Sonora.
The government sold the pre-emptive nationalization of the mineral resource as a “historic step” comparable to the nationalization of oil in 1938. But unlike oil then, lithium’s nationalization today is in some ways anticipatory obedience.
There are still no clearly identified deposits where mining could take place. And plans to set up a parastatal company to do the work have been accompanied by doubts about the lack of technical capacity.
>> Read here: “Threat to the ramp-up of electromobility” – battery manufacturers warn of high raw material prices
According to a market study, the demand for lithium could increase fivefold in the next 35 years. The raw material is essential for transporting the electrical charge in most modern high-performance batteries and is therefore particularly necessary for the booming electric vehicle market. According to the World Bank, production of the mineral would need to increase by 500 percent by 2050 to meet demand.
Unclear how much lithium Mexico has
The government claims lithium deposits could be among the “largest in the world”. Senator Alejandro Armenta of the ruling Morena party even claimed that profits from lithium mining could pay off large parts of the country’s foreign debt. Armenta predicted: “The carmaker Tesla will no longer buy its lithium in China, but in Mexico.”
Despite the high hopes placed in the white gold, Mexico has so far been a minor player in the lithium market. According to the United States Geological Survey (USGS), Mexico is only the tenth largest country in the world.
The quantities detected in Mexico so far amount to 1.7 million tons, which corresponds to 2.3 percent of the world’s reserves. In contrast, the world market leader Bolivia has proven 21 million tons of reserves. In Argentina there are still 19 million tons.
More: Gifted with battery raw materials – How Chile, Indonesia and Congo use their wealth of resources.