Resource Nationalism Takes Mexico's Lithium

Researched by Industrial Info Resources (Sugar Land, Texas)--On Tuesday, Mexico's congress passed an amendment to its mining law nationalizing lithium mining. The measure bans private ownership in the lithium market and will create a new state agency to focus on lithium development. Contracts for existing lithium exploration projects are under review, including Ganfeng International Trading's (Xinyu, China) Bacanora Lithium project in Sonora, Mexico.

Bacanora Lithium is the most advanced lithium project in Mexico, with site preparation beginning last year, and full production expected in 2024. The project will involve a traditional open-pit mine and conventional processing plant to produce lithium hydroxide.

"The move by the Mexican government is one example of the resource nationalism trend that has been growing in recent years and we've seen several Latin American countries including mining majors like Chile and Peru float similar changes to mining laws in order to secure long term supply of critical minerals," said Joseph Govreau, VP Research Metals & Minerals for Industrial Info.

Mexico has no operational lithium mines, but the bill adds a level of uncertainty to the fledgling lithium industry in the country and has put foreign investment into the sector on notice.

The global push for electric vehicles is driving demand for lithium and other battery metals, which are experiencing spiking prices due to rapid demand increase and supply-chain disturbances. This in turn is causing a flurry of exploration and feasibility study activity for lithium mining projects as countries look to secure long-term supply. Mergers and acquisitions of lithium properties are also on the rise, especially in Latin America, and most notably from Chinese companies such as Ganfeng, which last year acquired a majority portion of the project.

The Bacanora Lithium project is one of 239 lithium mining projects under development around the globe totaling more than $41 billion, according to Industrial Info's Global Market Intelligence. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed project reports.

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