Mexico and China

Mexico negotiating recovery of Sonora lithium concession

Bnamericas Published: Wednesday, January 25, 2023

Mexican President Andrés Manuel López Obrador (AMLO) says the government is trying to reach an agreement with a private sector company to recover a lithium production concession awarded in Sonora state before the nationalization of the metal in 2022.

"Lithium belongs to the nation, it belongs to Mexicans, but there is a company that had some exploratory work in a very small, very limited area, so we're trying to reach an agreement with them to avoid starting a legal process – an agreement, a conciliation," AMLO said in his morning press conference.

He added that minister of economy Raquel Buenrostro is in charge of the negotiations with the CEO of the lithium company, which he did not name.

The most advanced lithium project in Sonora is controlled by Chinese company Ganfeng Lithium, with construction expected to begin in 2024.

When asked what the company was requesting in exchange for returning the concession, AMLO said: "They want to have the mine, but they don't have the full permits. In addition, the law that was approved is for this strategic mineral to belong to the nation, to the people, not to individuals or to companies."

He also said earlier this month that he would travel to Sonora on February 17-19 to deliver the first concessions to a state-owned company that he did not identify, but which is expected to be lithium miner LitioMx, which was created in August last year after the reform of the mining Law.

Two weeks ago, AMLO announced that his administration plans to redefine the terms under which lithium concessions were granted before nationalization was agreed, with a view to paving the way to carry out exploitation of the metal in Sonora. He added that there were only "one or two" companies in that situation in any case.

Mexico's geological service (SGM) stated last year that 18 states in the country have lithium resources and Sonora state is thought to have some of the largest deposits in the world, although the soft metal is found in clay deposits, which are far more difficult to process than the brines typically found in Chile, Bolivia and Argentina.

Groups such as mining chamber Camimex and the association of mining engineers, metallurgists and geologists (AIMMGM) have pointed out that the Mexican State has no experience in lithium mining and have warned that the lithium in clay deposits is in very low concentrations, making it economically unfeasible to mine with current technologies.

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