Berliner Tageblatt - Mexican lawmakers pass lithium nationalization plan

The mining law reform submitted by President Andres Manuel Lopez Obrador puts the metal's exploitation in the hands of a state company, without the participation of private firms.

The plan was passed in the Senate with 87 votes in favor and 20 against, a day after it was approved by the lower house of Congress.

Both chambers are dominated by Lopez Obrador's Morena party.

Lopez Obrador told reporters that eight concessions already granted to companies for lithium exploration would be reviewed.

Previously the government has said the concessions would remain valid as long as the companies make the necessary progress towards starting production.

"We're going to develop the technology (to exploit the deposits) or acquire it, but the lithium is ours," said Lopez Obrador, who was elected in 2018 with a vow to overhaul Mexico's "neoliberal" economic model.

Lithium is mined mostly in Australia and South America, while China dominates the supply chain.

Mexico's deposits of the metal are mainly found in the northern state of Sonora, where drug traffickers and other organized crime gangs operate.

Lithium "will be the exclusive property of the state and for the benefit of the people. Our resources will be safe and the energy transition will be guaranteed," Lopez Obrador's spokesman Jesus Ramirez tweeted.

Mexico has lithium projects in the exploratory phase, but according to experts, it is not yet known if they are profitable and their exploitation could take up to two decades.

The lithium plan was originally included in constitutional reforms aimed at strengthening the state-owned electricity provider, but that bill failed to win enough votes to pass on Sunday.

The power reforms had alarmed the United States and Canada, prompting warnings that Mexico was in danger of violating its trade commitments by favoring state-run entities heavily dependent on fossil fuels.

While constitutional amendments require support from two-thirds of lawmakers, the mining law reform only needed a simple majority to pass.

L.Dubois--BTB