Mexico launches lithium nationalization to prevent “multinationals” from seizing it

The war of critical metals rages on because they are essential to the ecological transition and to advanced technology. In the latest installment to date, Mexico announced yesterday that it wanted to ban all new private companies from operating its lithium mines, a resource “nationalized” which is found en masse in this area of ​​Central America and which is now an integral part of the “heritage” out of the country. This is the meaning of the mining law reform passed on Monday, April 18, 2022 by the deputies of the majority of the president of the left, Andres Manuel Lopez Obrador.

“I just signed a mining law reform bill to keep lithium in the hands of the nation” […] Lithium, which is coveted by multinational corporations and governments of other countries, will not have them.” said the president before the vote in parliament.

Mexico is said to have significant reserves in the state of Sonora (north), the specialist site Mining Technology reported in 2019. The projects are currently in the exploratory phase. Previous governments granted eight concessions, which remain in effect.

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Passed by 298 votes out of a total of 500 deputies, the bill has yet to be voted on in the Senate, where the ruling Morena party also has a majority. The bill was sent to the House the day before and passed in a day of debate, after Sunday’s rejection of a constitutional reform aimed at strengthening the role of the state in the electricity market.

Rising global demand for lithium

Lithium has become a critical metal whose demand and prices are already rising. In 11 months, from February 26, 2021 to February 3, 2022, the global average lithium price rose 303.3%, according to the index, from $9,100 per ton to $36,700. Mineral Intelligence Benchmark† And by early March, it had risen again to $60,773.

And by 2030, the question will be multiplied by almost 4, mainly because of the need for the production of batteries for electric vehicles, Philippe Varin said during a Senate hearing Wednesday. Finally, according to experts from Eurométaux, the European association that currently brings together 61 companies in the sector, lithium demand (for the batteries that equip electric vehicles) should increase by 488% by 2050.

A critical resource for the automotive industry

The most important sales market for lithium is indeed more than 70% lithium-ion batteries, and to a lesser extent ceramics, glass and greases. According to the latest USGS report from the European government, global mining reached 82,000 tons in 2020, concentrated between Australia (40,000 tons), Chile (18,000 tons) and China (14,000 tons).

In terms of reserves, 21 million tons have been identified worldwide, including 9.2 million tons in Chile, 4.7 million tons in Australia and 1.9 million tons in Argentina.

According to the IEA, lithium could experience a bottleneck in chemical production as many small producers are financially constrained after years of low prices.

This lithium chemical production is highly concentrated in a small number of regions, with China accounting for 60% of global production (more than 80% for lithium hydroxide). As with copper, mines in South America and Australia are exposed to high levels of climate and water stress.

Projects around the world

Given the demand, many projects are emerging all over the world. In Chile, BYD, based in Shenzen, won a tender last January for a lithium depot for an amount of 61 million euros. The Chilean company Servicios y Operaciones Mineras del Norte SA also received a prize of 60 million euros. Each of them is rich in 80,000 tons of this strategic metal.

In Argentina, Eramet is building a factory in this desert of the Andean highlands, more than 3,800 meters above sea level. Operated in partnership with the world’s largest stainless steel producer, it aims to supply 15% of Europe’s lithium needs.

But European projects are also trying to see the light of day. But acceptance by civil society is not always easy. For example, in Serbia, Belgrade halted the project to exploit a lithium mine operated by Rio Tinto under pressure from environmentalists and the population.

A project in the Allier?

Investigations are also taking place in France. During the pandemic, the disruption of supply chains made the French government aware of the need to reduce the country’s (and Europe’s) dependence on imports of strategic metals, a market dominated in particular by China. It sets a target of 20% of Europe’s supply of lithium, nickel and cobalt by 2030 to enable the battery sectors for electric vehicles and smart magnets for offshore wind turbines to develop production locally. As such, France is studying several lithium mining projects in its territory.

In fact, in 2021 Imerys’ mining group received a first extension from the government until 23 May 2025 of its exclusive exploration license for lithium, tin, tantalum, niobium, tungsten and beryllium mines under the “Permis de Beauvoir”, in the Allier .

“We have a project in the mining and engineering exploration phase and we plan to work on the project in 2022 to see if it makes economic and environmental sense,” stated Sébastien Rouge, the group’s finance director during the presentation of the 2021 results, quoted by AFP, specifying: “but there will be no commercial lithium activity in 2022. We will first have to scientifically validate the presence and amount of lithium in the kaolin deposit.”

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