“It is not about closing the door to investment,” Mena said in an online session of the parliament. “There needs to be regulation (…) We are currently giving away our lithium to Chinese, Americans and Canadians (…) We shouldn’t be a paradise for exploitation. That’s called looting.”
Mexico has already scared private investors away by renegotiating gas pipeline contracts that the government declared exorbitant. It has also tried changing regulations for renewable energy projects.
El #litio debe ser propiedad de la nación como instrumento de desarrollo económico, no cometamos el error de ignorar su valor. Actuemos con responsabilidad para uso exclusivo de la nación.
En la sesión a distancia, expliqué la trascendencia de la iniciativa a favor de #México. pic.twitter.com/OngiDMyYxV— Alejandro Armenta (@armentaconmigo) November 12, 2020
Eyes on Sonora
While the silver-rich country is not a lithium producer, the situation is about to change when Bacanora Minerals (LON:BCN) and JV partner Ganfeng Lithium begin commercial production at their Sonora project, which is expected in 2023.
The mine will initially produce 17,500 tonnes of lithium per year. At full-tilt, Sonora will generate 35,000 tonnes of the battery metal a year.
Hong Kong-listed Ganfeng, which has agreements to supply lithium to Tesla and South Korea’s LG Chem, recently increased its stake from 22.5% to 50% in the project, which it believes it to be “world-class.”
Chief executive Wang Xiaoshen has expressed its reservations about the country’s plans for its lithium industry.
“Nationalization may not be a good idea; there are many bad examples of nationalization of resources,” Wang told FT.com in September. “An example is Bolivia. There are big lithium resources there but for many years no project has been built because Bolivians don’t allow foreign companies to own mining properties. That’s a big hurdle for attracting investment.”
Armenta, however, claims the value of Mexico’s lithium resources is more than four times the country’s sovereign debt and, as such, could be a solution to the nation’s current economic woes.
Prices for lithium are expected to climb in two years, when shortages in the market caused by curtailed production and halted expansions start to emerge.
