After his controversial energy reform bill was rejected by Congress in April, Mexico’s President Andrés Manuel ‘AMLO’ López Obrador shifted his efforts to the country’s lithium resources. Last month the Senate approved amendments to the mining law which put the exploration, extraction, and use of this ‘white gold’ under state control – essentially achieving with lithium what AMLO’s left-leaning government tried but failed to do for the energy sector as a whole: the nationalization of the production chain to reduce dependency on the private sector and attain greater economic sovereignty.
But the path toward an efficient production environment that could turn the resource into a profitable commodity – Mexico does not yet have any commercial lithium production – is no easy one, and will require more than simply putting the lithium industry in the hands of the state.
As with the energy sector, the full nationalization of Mexico’s lithium industry is opposed by industry experts and the U.S., Mexico’s top trade partner. Critics of nationalization highlight the economic, environmental, and even technical implications of taking private-sector benefits into consideration, especially considering lithium’s difficult extraction – something which could benefit from foreign investments.
Putting the lithium sector under the state’s “total control,” as AMLO wishes, will not serve as a guarantee that Mexico will reap all the benefits from this billion-dollar market with huge growth potential – demand for battery metals could increase 500 percent by 2050, with Mexican lithium on the list of in-demand resources.
The United States Geological System estimates that Mexico houses nearly 1.7...
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