“Lithium Belongs To The Nation”: Mexico Has Just Nationalized Its Mines But Now It Does Not Know What To Do With Them

Lithium belongs to the nation Mexico has just nationalized its mines but now it does not know what to do with them

It is one of the most coveted minerals at the moment. And Mexico has a lot. Specifically, 234,855 hectares will be nationalized “so that they cannot be exploited by foreigners, neither from Russia, nor from China, nor the United States.” This has been announced by López Obrador, president of the country, on a trip to Sonora.

It is estimated that Mexico has 1.7 million tons of unexploited lithium. A figure that is far from that offered by countries such as Bolivia, Argentina, or Chile, in America, but that places it as the tenth country in the world with the largest amount of white gold to be exploited.

The political movement has been brewing since April to shield 2.3% of the world’s reserves of this mineral, key in the manufacture of batteries for electric vehicles. The decision is key just at the moment that the United States has opted to promote the manufacture of electric vehicles.

The manufacturers of the United States began to look favorably on the neighboring country since it was positioned as a very close region in which to mine lithium and transfer it to the battery factories that Joe Biden, president of the United States, wants to install in the country.

In addition, it also coincides with Tesla’s alleged interest in building a plant in Mexico, as well as recurring rumors that the company is considering mining the mineral itself to reduce costs that Elon Musk has come to consider disproportionate.

The problem is not extracting it

Lithium mining and extraction is being too slow for the volume of demand required by the electric car market and plans. The manufacturers of electric cars themselves have thought of converting themselves into mining companies, but starting up the system and obtaining maximum performance is too slow.

It’s not that lithium is scarce, it’s that the mineral is being mined at a very slow rate. A context that has triggered panic buying, raised its price and verified the tight control that China has over the supply chain.

But, in addition, Mexico is encountering a problem: what to do with lithium? And it is that, in recent months, López Obrador himself has recognized that they need private investment to convert lithium into batteries since the cost is so high that they could not assume it.

It is of little use to extract lithium if, later, it is sold as raw material for others to manipulate and extract from it the greatest economic return in the chain. It is a problem that has become evident in Extremadura, where various companies have been placed under a condition that, if they extract lithium there, they will have to use it to manufacture batteries in the region and that the money does not fly to other regions and countries.

The consequence is that the reform of the country’s Mining Law, which specified that only the State could extract and produce lithium in the country, was voted on in April but, since then, the State has not known how to make the investment profitable and has not has found private partners who are willing to embark on the adventure of Mexican white gold.