Liberia to review ArcelorMittal concession agreement

Reuters | April 21, 2022 

A freight train from ArcelorMittal carrying iron ore from the Nimba deposit to the port of Buchanan, Liberia. Image courtesy of Alamy.

Liberia will review its iron ore concession agreement with steel and mining company ArcelorMittal as well as other concessions signed by the West African country’s current and previous governments, Parliament speaker Bhofal Chambers said on Thursday.


The announcement risks disrupting ArcelorMittal’s plans to triple its iron ore production in Liberia and stay in the country for at least 25 more years, which the government had agreed to in September.

Chambers said parliament had asked ArcelorMittal to review the Mineral Development Agreement (MDA) the company is trying to get ratified.

“We did not outright reject it. We said it should be renegotiated,” he said.

ArcelorMittal did not immediately reply to a request for comment. It had said on March 31 that it was “concerned” about the ratification process for the MDA, which would be its third in Liberia since the first one it signed in 2005.

Parliament will also review palm oil and rubber concessions.

“We will not be deterred,” Chambers said, without providing a timeline for the review.

Liberia, which has significant mining and agricultural potential, has attracted billions of dollars in resource investment since the end of a 1989-2003 civil war, mainly for iron ore and gold.

But infrastructure remains underdeveloped and most of its 5 million people live in poverty.

(By Alphonso Toweh, Helen Reid and Sofia Christensen; Editing by Sandra Maler and Grant McCool)

CHILE
Los Pelambres expansion to cost Antofagasta $900m more than planned

Cecilia Jamasmie | April 21, 2022 

Antofagasta’s Los Pelambres has been hit by the lack of rainfall. 

(Image courtesy of Antofagasta Minerals | Flickr.)

Chilean miner Antofagasta (LON: ANTO) said on Thursday the ongoing expansion of its flagship Los Pelambres operation in the home country would cost $2.2 billion, up from the previous estimate of $1.7 billion.


The revised figure represents a 30% increase from the costs estimated in 2021 and a 70% jump from the original estimate of $1.3 billion.

The company said the main reasons behind the fresh surge were the impact that recent waves of covid-19 had in costs and the construction schedule, as well as general inflation, including higher input prices, wages, labour incentives and logistics costs.

Antofagasta noted the completion schedule for the project remained unchanged, with the desalination plant expected to be finalized in the second half of this year and the expanded concentrator plant in early 2023.

The Los Pelambres expansion, 73% complete as of the end of March, will add 60,000 tonnes of copper a year over the first 15 years to the company’s overall production. Throughput at the plant will be increased from 175,000 tonnes of ore a day to an average of 190,000 tonnes a day.

The project includes the construction of a desalination plant and water pipeline, which will also benefit the existing operation in cases of prolonged or severe drought, such as the one currently hitting miners and wine makers alike. The facility could also be used for a potential further expansion, which may follow if Antofagasta can secure the required environmental and regulatory approvals.

The Chilean government recently named the miner in a lawsuit over alleged environmental damage caused in the northern Salar de Atacama salt flats, the world’s driest place on earth.

The State Defense Council’s (CDE) legal action singled out BHP’s Escondida, the world’s largest copper mine, Antofagasta and Barrick’s 50-50 Zaldívar operation and Albemarle’s lithium assets.
Drought impact

Antofagasta’s copper production in the first quarter of 2021 was down 24% from the same period last year, and 22% from the previous quarter, at 138,800 tonnes.

The expected output drop reflected the effects of a severe drought affecting Chile’s northern and central zone, where Los Pelambres is located. Lower grades mined at Centinela also weighed on production results, Antofagasta said.

The company, majority-owned by Chile’s Luksic family, one of the country’s wealthiest, kept its full year 2022 guidance of 660,000-690,000 tonnes. This range assumes there is no precipitation until the rainy season and the desalination plant at Los Pelambres starts operating in the second half of the year, Antofagasta said.

Copper companies across Chile have been forced in recent years to find alternative means to feed water to their mines as drought and receding aquifers have hampered operations. Many have sharply reduced use of continental freshwater or turned to desalination plants.

The country’s copper agency Cochilco estimates that mining’s use of seawater — either used directly or desalinated — will increase 167% by 2032, while freshwater use will decline 45%. By the end of that period, 68% of water used by the industry will come from the ocean, the agency has said.

Chile constitution drafters reject mining-adverse proposal

Cecilia Jamasmie | April 22, 2022

Chile’s constitutional drafters have sent back to the drawing board dozens of articles regarding mining, water and environmental rights. (Image courtesy of Chile’s constitutional convention.)

Chile’s constitutional assembly has rejected a proposal from the environmental committee seeking to tighten up rules related to the protection of the country’s natural resources, which would have hit the mining sector if they became law.


Among the changes suggested, there was one granting nature the status of a legal subject with rights, keeping environmental crimes free of any statutes of limitations and extend protections of water sources, glaciers, wetlands and native forest.

The articles had already been toned down amid criticism from miners and analysts concerned about radical proposals such as nationalizing key assets.

Constituents rejected the 52 articles presented by five votes, preventing voting on individual items and returned the entire proposal to the environmental committee for further revision. To make it into the new constitution, each article needs to receive at least 103 out of the 154 possible votes.


This is the second time the committee’s report has been sent back to the drawing board, as the first presentation saw only six of 40 articles approved

Among the approved items there was one that makes it compulsory for the state to deal with a the current climate and ecological crisis and one that grants nature the status of a legal subject with rights, including acknowledging the rights of all animals to be protected from abuses.

“We interpret the vote as a signal in the sense that, in addition to raising environmental standards, it is necessary that there are regulations that provide certainty and stability for the development of mining activity,” Chile’s mining council executive president Joaquín Villarino said in a statement.

Mining has historically been one of the country’s most important economic sectors, with copper representing the lion’s share of the sector’s contribution to gross domestic product. The country also hosts the world’s largest known lithium reserves.

Any major changes affecting the sector could dramatically impact the supply of minerals that are critical for the world’s industrialization and energy transition, the mining sector has warned.

The assembly has until mid-May to approve articles for the draft constitution and until July to have the draft fully completed. Chileans will vote to approve or reject the new constitution on Sept. 4.

POSTMODERN ALCHEMY
Turmeric extract combined with gold helps create greener, more efficient fuel cells

Staff Writer | April 22, 2022 

Turmeric powder. (Image by formulatehealth, Wikimedia Commons).

Curcumin — the substance in turmeric — and gold nanoparticles have been combined to create an electrode that requires 100 times less energy than hydrogen to efficiently convert ethanol into electricity.


According to researchers at the Clemson Nanomaterials Institute and the Sri Sathya Sai Institute of Higher Learning, of all the catalysts for alcohol oxidation in alkaline medium that exist, the one they prepared is the best so far. Thus, their finding paves the way for replacing hydrogen as fuel cell feedstock.

Fuel cells generate electricity through a chemical reaction instead of combustion.

Hydrogen fuel cells are highly efficient and do not produce greenhouse gases. While hydrogen is the most common chemical element in the universe, it must normally be derived from fossil fuels because it occurs naturally on earth only in compound form with other elements in liquids, gases or solids.

The necessary extraction adds to hydrogen fuel cells’ cost and environmental impact.

In addition, hydrogen used in fuel cells is a compressed gas, which creates challenges for storage and transportation. Ethanol, an alcohol made from corn or other agricultural-based feeds, is safer and easier to transport than hydrogen because it is a liquid.

“To make it a commercial product where we can fill our tanks with ethanol, the electrodes have to be highly efficient,” Lakshman Ventrapragada, one of the researchers involved in the study, said in a media statement. “At the same time, we don’t want very expensive electrodes or synthetic polymeric substrates that are not eco-friendly because that defeats the whole purpose. We wanted to look at something green for the fuel cell generation process and making the fuel cell itself.”
Mixing a spice with gold

In that search, Ventrapragada and his colleagues focused on the fuel cell’s anode, where the ethanol – or other feed sources – is oxidized.

Fuel cells widely use platinum as a catalyst. But in addition to being costly, platinum suffers from poisoning because of reaction intermediates such as carbon monoxide.

The researchers, thus, used gold as a catalyst and instead of using conducting polymers, metal-organic frameworks, or other complex materials to deposit the gold on the surface of the electrode, they employed curcumin.

Curcumin was used to decorate the gold nanoparticles to stabilize them, forming a porous network around the nanoparticles. The scientists, then, deposited the curcumin gold nanoparticle on the surface of the electrode at a 100 times lower electric current than in previous studies.

Without the curcumin coating, the gold nanoparticles agglomerate, cutting down on the surface area exposed to the chemical reaction.

“We need this coating to stabilize and create a porous environment around the nanoparticles, and then they do a super job with alcohol oxidation,” researcher Apparao Rao said in a media statement.

“There’s a big push in the industry for alcohol oxidation. This discovery is an excellent enabler for that. The next step is to scale the process up and work with an industrial collaborator who can actually make the fuel cells and build stacks of fuel cells for the real application.”

BHP cuts copper output outlook over Chile protests, environmental concerns

Reuters | April 21, 2022 | 

BHP has long pumped water from Atacama’s aquifers to feed operations at its sprawling Escondida mine in Chile. (Image courtesy of Rio Tinto.)

BHP Group Ltd cut its annual copper production outlook on Thursday as operations at its Escondida project in Chile were impacted by labour shortages due to rising covid-19 cases, while road blockades associated with social unrest in the country blocked access to the mine.


Chile, the world’s top copper producer, earlier this month sued BHP, among other miners, over alleged environmental damages caused by its operations in the Atacama salt flats.


The road blockades, threats of work stoppage over alleged worker contract breaches, and surging covid-19 infections at Escondida affected production at the project, which houses the world’s largest copper deposit.

“Our Chilean assets experienced a challenging operating environment in the March 2022 quarter due to a reduction in our operational workforce as a result of a significant increase in covid-19 cases in Chile,” the miner said in its third-quarter production report.

Copper production from Escondida is now expected between 1,000 thousand tonnes (kt) and 1,030 kt for 2022, down from its previous range of 1,020 kt to 1,080 kt, resulting in a slight downgrade to total copper output forecast to between 1,570 kt and 1,620 kt.

The miner has logged 1,112 kt of copper output so far this financial year, down 10% from last year. Its third-quarter iron ore output from Western Australia came in flat from a year ago, and missed consensus estimates.

(By Sameer Manekar; Editing by Sherry Jacob-Phillips)

Peru says 50-day protest lifted at Cuajone mine

Reuters | April 22, 2022 | 

The vast Cuajone mine complex begins with a water supply at Lake Suche at 14,500 feet in the Andes and ends with a smelter on the South Pacific coast. (Image courtesy of Fluor.)

Peru said on Friday a group of indigenous communities had lifted a protest against Southern Copper Corp’s Cuajone mine that had forced a suspension of production for more than 50 days.


The world’s No. 2 producer of copper, Peru had sent its army to restore mine operations, dismissing as “irrational” the financial demands of nearby residents.

Southern Copper has yet to say if it will restart production after the protest suspension.

Unrest spread later to MMG’s giant Las Bambas mine, Peru’s fourth-largest copper mine and the world’s ninth-largest, which has been shut and reopened at least twice this year. The latest suspension was announced this week after residents of the nearby Fuerabamba community entered the mine and set up camp inside of it.

Glencore’s Antapaccay, Peru’s sixth largest copper mine, has also been the target of demonstrators this week, according to local media.

Peru, the world’s second largest producer after Chile, is also a significant silver and zinc supplier.

The mines affected by this week’s protest produced almost 500,000 of copper combined in 2021, with Las Bambas churning out 300,000 tonnes of copper Cuajone another 170,000 tonnes.

(By Marcelo Rochabrun; Editing by Clarence Fernandez)

Fifth of Peru copper mining goes offline with more shutdowns likely

Bloomberg News | April 20, 2022 |

Pedro Castillo. (Image from Castillo’s Twitter profile)

Sky-high metal prices and accelerating general inflation are fueling another up-tick in resource nationalism and social unrest in Peru, among the top suppliers of copper, zinc and silver.


As of Wednesday, about a fifth of the country’s copper output will be off-line as MMG Ltd’s Las Bambas mine joins Southern Copper Corp.’s Cuajone in succumbing to community protests. At the same time, unions in the mineral-rich Cusco region are staging strikes against rising prices, while residents near a Glencore Plc copper mine are preparing to resume protests.

To be sure, community conflicts are nothing new in Peru and some of the current unrest is more about protecting water supplies than grabbing a bigger share of the mineral spoils.

But having more than one major copper mine down at any one time is unusual, and this time round the mining protests are embedded in more generalized unrest over living costs that has inflamed an already tense political climate under President Pedro Castillo. Since the former rural activist from a Marxist party took office, the number of social conflicts is up about 7%.

With lawmakers discussing measures to appease the population’s pain from the fastest inflation in 24 years, politicians are looking to the mining industry to help foot the bill.

On Tuesday, Pedro Francke, a former Castillo finance minister and moderate left-winger, said more than a $1 billion could be added to state coffers with a modest hike to mining taxes. Others have tapped into the tensions to rekindle calls for more drastic measures. “The nationalization of strategic resources is the cornerstone of a country’s development,” Vladimir Cerron, founder of Castillo’s own party, wrote in a Twitter post.

The president, who has dodged two impeachment attempts since taking office in July, is being criticized by both the mining industry and some community groups.

Southern Peru Chief Financial Officer Raul Jacob said this week that dialog at Cuajone hadn’t advanced much amid “certain passivity” by the government to resolve conflicts.

The industry puts some of the blame for an up-tick in unrest on the administration’s prioritizing the right to protest over other concerns such as free transit. In isolated areas with poor services and infrastructure, mines can become de facto local governments and therefore an easy target for grievances.

But Castillo is having to walk a tight-rope. After softening his tone on resource nationalism to appease more moderate factions, he’s grappled to maintain support of his party’s more hardline factions and the rural voters who put him in power.

Carlos Hanco, youth secretary of the National Coordinator of Gas Users in Cusco, is among leaders pushing for a review of contracts covering natural gas, minerals and water. His grievances are directed both at the government and legislators.

“It is a demand for the Castillo government to fulfill the campaign promises,” Hanco said. “We also demand Congress stop being a coup plotter and work for the needs of the people.”

(By María Cervantes and James Attwood)

Four miners dead, six trapped after tremor in Polish coal mine
Reuters | April 24, 2022 | 

Free empty mine. (Reference image from RawPixel, CC0).

Four miners were killed after a tremor at a coal mine in southern Poland on Saturday and rescuers were still trying to reach six others trapped underground, the mine’s owner JSW said.


“The doctor confirmed the death of two more miners… The tragic balance sheet of yesterday’s high-energy tremor at the mine increased to four people,” JSW said in a statement on Sunday.

The company had earlier announced the deaths of two of the miners.

The tremor shook JSW’s Borynia-Zofiowka mine on Saturday morning. There were 52 workers in the area, 42 got out on their own, and 10 remained underground.

After many hours, rescuers reached four miners late on Saturday but they did not show any signs of life, JSW said earlier.

“The conditions allow us to continue the search for our six colleagues,” JSW Chief Executive Tomasz Cudny told reporters on Sunday.

This is the second accident in a week at a coal mine owned by JSW. Last Wednesday, five people died and seven were trapped in the Pniowek coal mine in southern Poland after an explosion.

Polish Prime Minister Mateusz Morawiecki, who visited the Borynia-Zofiowka mine on Saturday, said that all procedures in both mines will be “thoroughly checked” by a special commission.

(By Pawel Florkiewicz; Editing by Kim Coghill and Susan Fenton)

Ten missing as second JSW-run coal mine in Poland hit by tremor
Bloomberg News | April 23, 2022 |

Hardhat in a mine. (Image from RawPixel, CC0).

Ten people are missing after an underground tremor and methane gas leak at the Borynia-Zofiowka mine operated by JSW SA, Europe’s biggest coking coal producer.


JSW Chief Executive Officer Tomasz Cudny said in a statement that a rescue operation was underway.

The emergency follows another incident earlier this week at the Pniowek mine, also run by JSW, that left five miners dead and seven missing following repeated methane explosions. The latest accident took place at 3:40 a.m. on Saturday about 900 meters (2,952 feet) underground, with the tremor trapping 10 of the 52 workers in the area.

“The first rescue group reached the excavation where the shock occurred,” Cudny said. The operation is “difficult” because of the atmospheric conditions following the gas leak although there are “no signs indicating ignition or fire.”

JSW shares dropped 14% last week, their worst performance since October 2020.

(By Wojciech Moskwa)

Three miners killed in explosion at Russian mine
Reuters | April 23, 2022 | 

(Reference image by Ural Mining and Metallurgical Company).

Three miners were killed in an explosion at the Gaisky ore mining and processing plant in Russia’s Orenburg region, Russian news agencies quoted the regional prosecutor’s office as saying on Saturday.


The office also said that the remaining 88 people were evacuated.

The Gaisky copper and zinc mine and mill complex, one of Russia’s largest copper mines, is owned by the Ural Mining and Metallurgical Company holding. It is located at the far southern tip of the Ural mountains near Russia’s border with Kazakhstan.

(By Lidia Kelly; Editing by Kim Coghill)

MOBI Latam, EnergyX aim to create Bolivian domestic lithium battery supply chain

Staff Writer | April 20, 2022 | 

Bolivia’s Uyuni salt flat. 

(Image by Diego Delso, Wikimedia Commons).

Bolivian urban eco-mobility and clean energy startup MOBI and American lithium and battery company Energy Exploration Technologies (EnergyX) have partnered to work towards creating a Bolivian domestic lithium battery supply chain to develop the region’s electric mobility market.


Bolivia has 9 million tonnes of identified lithium resources buried beneath its salt flats, the largest being the Salar de Uyuni, yet the country has had barely any production of lithium chemicals.

The South American nation has been working towards creating the world’s first sustainable lithium economy capable of producing and processing the metal for domestic and international needs, the companies said in the media statement, adding that the partnership between MOBI and EnergyX aims to take the country one step closer to becoming a green energy superpower.

MOBI, founded in 2020, closed the largest ever seed round for a startup in Bolivia at $1.38 million off a $5 million valuation, and has a fleet of electric scooters, bikes, mopeds and e-bikes.

EnergyX is integrated into the lithium industry’s supply chains from brine to battery, and will provide MOBI work on developing a next generation SoLiS battery for MOBI’s fleet.

This partnership, the company said, will see EnergyX’s direct source of lithium and batteries help MOBI fleet and swap stations by creating a domestic brine to battery ecosystem within Bolivia.

EnergyX was founded in Austin, Texas in 2018 and currently has over 50 patents focused on creating more efficient and sustainable lithium extraction processes, as well as lithium batteries for electric vehicles and grid-scale renewable energy storage.

RELATED: Lithium mining: ‘A new Bolivia’, says EnergyX CEO

EnergyX is currently building its Innovation Labs in Austin, Texas, and is scaling up its operations after raising $20 million in funding and deploying their first LiTAS direct lithium extraction plants to Bolivia’s Salar de Uyuni.

“Latin America has the capacity to become a global powerhouse in electric micro-mobility, and we believe Bolivia can be the leader of this transition,” MOBI CEO Ariel Revollo said in a news release.

“With domestic lithium supply chains being developed, continued infrastructure improvements and the people’s demand for local sustainable solutions, Bolivia has all the hallmarks of a country on the verge of an economic boom,” he said.

This partnership is one step towards developing the local micro-mobility market and helping create a domestic innovation pipeline that integrates Bolivia’s lithium, manufacturing, and transportation,” EnergyX Director of Bolivia, Mario Gianella said.

“We are working on integrating global lithium supply chains from brine to battery, and this partnership with MOBI reflects this.”

New tech will free cheaper, cleaner lithium supply – report

Frik Els | April 21, 2022 

99.9% lithium. Stock image.

Elon Musk’s worries about nickel are well-documented and in an earnings call Wednesday, Tesla’s CEO added lithium to his list of raw material concerns. Battery production – more specifically lithium – is the “fundamental limiting factor” for electric vehicle adoption worldwide, Musk told investors:


“We think we’re going to need to help the industry on this front.

“I’d certainly encourage entrepreneurs out there who are looking for opportunities to get into the lithium business. Lithium margins right now are practically software margins.”

Musk is not alone in fretting about the market as lithium prices surge and demand from the electric vehicle market shows no sign of moderating, but a recent report by consulting firm McKinsey argues worries about a shortfall may be overblown.

While lithium demand is skyrocketing – from an estimated 500,000 tonnes in 2021 to as much as 3.8 million tonnes by the end of the decade – new sources and new technologies will be enough to supply the market, McKinsey says.

RELATED: Mexico nationalizes lithium mining

The consulting firm says alongside conventional lithium supply, which is expected to grow by over 300% through 2030, direct lithium extraction (DLE) and direct lithium to product (DLP) “can be the driving forces behind the industry’s ability to respond more swiftly to soaring demand.”

In addition to filling supply gaps DLE and DLP could also reduce the industry’s environmental, social, and governance footprint, and lower costs by boosting recovery and capacity, McKinsey says.

Mckinsey acknowledges DLE is still in its infancy and of the five types of technologies only adsorption processes are already in commercial use, but DLE has several benefits including eliminating or reducing the size of evaporation ponds, less fresh water use, decreased production times, and increased recoveries from 40% for traditional brine operations to over 80%.

DLE, DLP and DSO

While geothermal and oil waste-water brines with grades of 100 to 200 parts per million will play a role in future supply with carmakers Renault, Stellantis and General Motors are already invested in early stage geothermal projects, any short term supply shocks could also be mitigated by direct shipping ore (DSO) which happened in 2018, when lithium prices previously spiked.

As for secondary supply, McKinsey says with expected battery lifetimes of around 10 to 15 years for passenger vehicles coupled with the possibility of extending EV battery life through use in the energy-storage sector, battery recycling is expected to only represent some 6% of total supply in 2030.

According to the report, in 2020, more than 90% of all lithium production occurred in just three countries: Australia, Chile and China, but new supply could come from places like Mexico, Canada, USA, Ukraine and Bolivia, with recently mapped reserves and also regions not usually associated with the battery raw material including Thailand, UK, Peru and Siberia.

Lithium prices cool

Lithium prices took a breather during the first half of April as lockdowns in China made trading difficult, but Benchmark Mineral Intelligence says that for chemical processors and battery manufacturers, the lull is unlikely to last.

The mid-April assessment by Benchmark shows battery grade lithium carbonate (EXW China, ≥99.5% Li2CO3) averaging $78,350 a tonne. That’s down just under 1% over two weeks. In April last year it was trading around $15,000 a tonne.

Prices for lithium hydroxide, used in batteries with high-nickel cathodes, continue to rise. Hydroxide historically trades at a premium to carbonate and has been playing catch up – the gap is now down to around $400 a tonne, from nearly $10,000 in February.

Benchmark says the slight downtrend in carbonate pricing “was not indicative of a wider market correction, but rather a temporary pause as a result of covid lockdowns in China, with expectations that prices will continue to increase in May if virus measures are eased.”

Head of Mexico City government compares lithium nationalization to that of oil 84 years ago

Staff Writer | April 24, 2022 |

Claudia Sheinbaum, head of the government of Mexico City.

 (Image by the CDMX government, Twitter).

Following the nationalization of the lithium industry approved by the country’s Senate on April 21, Claudia Sheinbaum, head of the government of Mexico City, said during a public speech over the weekend that the decision is comparable to the nationalization of the oil industry approved during the presidency of Lázaro Cárdenas, 84 years ago.


“What did President Lázaro Cárdenas do in 1938? He nationalized oil. For what? So that oil was used for the well-being of the Mexican people and so that foreign companies would not take it away,” Sheinbaum said. “Well, what President López Obrador did is similar to what General Lázaro Cárdenas did: he gave lithium back to Mexicans.”

The government official said that prior to the approval of the new law, lithium deposits could be privatized and that many foreign mining companies would take it and give very little in return.

Sheinbaum also said that the opposition MPs who voted against the initiative betrayed their country, while those who voted for it are “nationalists committed to their country.”

The new law elevates lithium to the category of “strategic mineral,” declaring the exploration, exploitation, and use of lithium to be the exclusive right of the state. It also includes a clause allowing the state to take charge of “other minerals declared strategic” by Mexico.

Since the bill was passed, 90 days started running for the executive to create a new, decentralized body to deal with all lithium-related matters, which means that no new concessions, permits or contracts will be granted.

When announcing the approval, López Obrador said his administration will review all lithium contracts, which casts a shadow of doubt over projects already being developed in the country, including the one held by Bacanora Lithium (LON: BCN) in the country’s northwest.

Mexico nationalizes lithium mining

Cecilia Jamasmie | April 21, 2022 

Andrés Manuel López Obrador. 

(Image courtesy of Mexican President’s Office.)

Mexico has officially nationalized its lithium industry after the Senate approved by 87 votes in favour, 20 against and 16 abstentions the mining reform proposed by President Andrés Manuel López Obrador, which gives the state exclusive rights over the battery metal.


The law, which came into force on Thursday, was approved in record time — only two days after introduced by López Obrador to Congress.

The bill elevates lithium to the category of “strategic mineral”, declaring the exploration, exploitation, and use of lithium to be the exclusive right of the state. It also includes a clause allowing the state to take charge of “other minerals declared strategic” by Mexico.

The executive has now 90 days to create a new, decentralized body to deal with all lithium-related matters.

Since taking power in 2018, López Obrador has fought to reverse resource reforms under previous governments, which opened up the oil and electricity sectors to private investment. He has pushed a resource exploitation model that gives priority to state-controlled companies.

The President said his administration will review all lithium contracts, which casts a shadow of doubt over projects already being developed in the country, including the one held by Bacanora Lithium (LON: BCN) in the country’s northwest. The company, owned by China’s Genfeng Lithium, owns the giant Sonora project, which is slated to produce 35,000 tonnes of the metal per year starting in 2023.

Bacanora has been building a 35,000 tonnes per annum battery grade lithium operation in Mexico’s Sonora state.

 (Image courtesy of Bacanora Lithium.)

The law would likely bring trade tensions with the country’s northern neighbours as it is said to violate the United States-Mexico-Canada Agreement (USMCA).

Kenneth Smith Ramos, who headed technical negotiations for the now defunct North American Free Trade Agreement (NAFTA), told local media that declaring lithium a strategic mineral is an issue as lithium was not designated as such when the three nations signed the accord.

The Mexican Association of Mining Engineers, Metallurgists and Geologists said in a statement that “clays containing lithium have been located” in the country. “To the best of our knowledge, no country has produced and commercialized lithium from clays,” it added.

Most of the world’s current lithium output is locked away in long term deals as downstream chemicals producers, battery makers and electric vehicles makers are frantically trying to secure future supply.

Mexico’s reserves of the sought-after metal positions it in the 10th place among the world’s top producers, data from the US Geological Survey shows.