Mexico
News

Mexico reveals details of state lithium company

Bnamericas Published: Wednesday, August 24, 2022
Mexico reveals details of state lithium company

Mexican President Andrés Manuel López Obrador has formalized the creation of state-owned lithium company Litio para México (LitioMx) via decree as an entity under the control of the energy ministry (Sener).

The announcement published as a decree in the federal gazette on Tuesday is a key advance in the project as envisioned by the president and approved by congress in April.

The decree went into effect on Wednesday, starting the clock on a 180-day window for the company to begin operating.

The goal of LitioMx “is the exploration, exploitation, processing and use of lithium, located in national territory, as well as the administration and control of the economic value chains of said mineral,” according to the decree.

Its CEO will be a presidential appointment based on the recommendation of the energy ministry.

The company’s board of directors will have five voting members comprised of executive branch appointees; namely, the energy minister, finance minister, economy minister, interior minister and the head of environmental agency Semarnat.

This concentration of political appointees at the helm stands in contrast to how the boards of Mexico’s state-owned companies have been established in the past. 

Previous administrations set up the boards of state-owned enterprises with ministers often joined by company executives, independent business advisors and even worker representation.

PRIVATE SECTOR PARTICIPATION

Section VII of article 13 stands out in the decree, granting LitioMx the ability to “associate with other public and private institutions … to administer and control the activities necessary for the production, transformation and distribution of products derived from lithium.”

While this seems to leave the door open to private sector participation, questions remain over LitioMx’s involvement moving forward, particularly with respect to pre-existing private projects under development.

STRATEGIC MOVES

López Obrador has become a fierce advocate for developing lithium as a strategic resource in Mexico, given the soft, white metal’s use in energy storage applications and importance in the global energy transition to renewable energy.

He has also pushed to participate in discussions on regional coordination of lithium development with Chile, Argentina and Bolivia. The three neighboring countries are thought to host some 56% of the world’s lithium resources.

Latin American-focused think tank Celag estimates that if potential Peruvian, Mexican and Brazilian reserves are added, the region would control over 68% of global reserves of the metal.

LOCAL POTENTIAL

Geological service SGM said earlier this year that it estimates that 18 states in Mexico possess lithium deposits, with Sonora state containing what some say is one of the largest deposits in the world, with an estimated 243Mt (million tonnes) spread over 100,000ha.

Bacanora Lithium, recently acquired by China’s Jiangxi Ganfeng Lithium, controls the site in Bacadéhuachi. The US$420mn project, dubbed Sonora, is still in early works, with construction eyed for 2024.

A US$380mn expansion project, Sonora stage 2, is set to start operations by 2028.

Mexico has 20 lithium projects listed in the BNamericas database, spread over Sonora, Baja California, Zacatecas, San Luis Potosí and Coahuila states.

Apart from Sonora and Sonora stage 2, all are still in the exploration phases.

Questions remain, however, over the quality of lithium available in Mexico. National mining chamber Camimex has gone on record to say the concentration of the metal in the country's deposits are low, which makes extraction complicated, adding that "the country is far from becoming a world [lithium] power.”

Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects in: Mining & Metals (Mexico)

Get critical information about thousands of Mining & Metals projects in Latin America: what stages they're in, capex, related companies, contacts and more.

  • Project: Media Luna
  • Current stage: Blurred
  • Updated: 3 weeks ago
  • Project: Evelyn
  • Current stage: Blurred
  • Updated: 3 weeks ago
  • Project: San Javier
  • Current stage: Blurred
  • Updated: 4 weeks ago
  • Project: Alacrán
  • Current stage: Blurred
  • Updated: 1 month ago
  • Project: La Joya
  • Current stage: Blurred
  • Updated: 2 months ago
  • Project: Pitarrilla
  • Current stage: Blurred
  • Updated: 2 months ago

Other companies in: Mining & Metals (Mexico)

Get critical information about thousands of Mining & Metals companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Thermo Fisher Scientific Latam
  • Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in serving science, with annual revenue of approximately $40 billion. Our Mission is to enable our customers to mak...
  • Company: Colibri Resource - Silver Spruce JV
  • Colibri Resource - Silver Spruce JV is a company formed by Colibri Resource Corp., and Silver Spruce Resources Inc. for the execution of the Jackie project, which is located in ...
  • Company: Cámara Minera de México  (Camimex)
  • Mexican trade organization Camimex represents the interests of the local mining industry — providing a clear voice for Mexican mining. Headquartered in Mexico City, Camimex has ...
  • Company: Grupo Acermex11
  • Grupo Acermex11 is a Mexican corporate business group that operates through its subsidiaries in different sectors of the economy, including industrial, commercial, agricultural ...
  • Company: Fresnillo Plc  (Fresnillo)
  • Fresnillo Plc, a subsidiary of Mexican firm Industrias Peñoles (75% ownership), is a precious metal mining company incorporated in the UK and headquartered in Mexico City. Fresn...
  • Company: Empresas Matco, S.A. De C.V.  (Matco)
  • Empresas Matco S.A. de C.V. is a Mexican equipment and services supplier for the construction, mining, transportation, power generation, agriculture, aquaculture, aggregates, ma...