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lithium in the process of being nationalized

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By approving the nationalization of lithium, Mexican deputies began, on Monday, April 18, the process of nationalizing a resource considered strategic in the context of the ecological transition. The electric car boom is fueling an international rush for “white gold”, in which Latin America is a major player. In Mexico, but also in Chile or Bolivia, the left is seizing the question.

national heritage

The case was conducted smoothly in the Chamber of Deputies in Mexico City: transmitted the day before to elected officials, the law paving the way for the nationalization of lithium was adopted in a day of debate, with the support of 298 of the 500 deputies. The text was immediately sent to the Senate, where the ruling party Morena (Movement for National Regeneration) also has, with its allies, the majority.

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For President Andres Manuel Lopez Obrador (nicknamed “Amlo”), it’s a victory. According to studies carried out in 2019, Mexico has significant reserves in the state of Sonora, towards the American border. In the eyes of the Head of State, representative at 68 of a nationalist left, more attached to the mining sector than to the environment, this resource is part of the national heritage. It should therefore be used “for the exclusive benefit of the people of Mexico”not private interests.

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A very different approach from its predecessors, who had granted eight concessions to different companies – mainly one Chinese, one Canadian and one American. The projects are currently only in the exploratory phase, but the Mexican press evokes “one of the most important sites in the world”.

Failure on electricity

If the vote of the deputies is a victory for the Mexican presidency, it is also the response to a failure which occurred a little earlier, still on the theme of energy: on Sunday, the Morena party and its allies did not obtain the required qualified majority of two-thirds of the votes in the Chamber of Deputies to have a constitutional reform on electricity adopted.

After more than twelve hours of heated debate, 275 deputies voted for and 223 against the proposed reform of three articles of the Constitution on “ownership of land and water” and the prohibition of monopolies.

The Head of State’s project planned to reverse the liberalization approved in 2013, guaranteeing 54% of the market to the public company Federal Electricity Commission, against 38% currently. The president had made this question a major issue of national sovereignty in the face of foreign companies, in particular American and Spanish.

Debates in Chile, an impasse in Bolivia

With the rise of electric cars, the rush for lithium has intensified all over the world. In one year, prices have soared: between January 2021 and January 2022, the price of lithium carbonate, the component most used by industry, was multiplied by five.

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Among the major players in this booming market are several Latin American countries. Chile and Argentina form, with Bolivia, the “lithium triangle” where the largest known reserves in the world are concentrated. The first two countries are among the world’s leading producers, along with Australia and China.

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However, the question of lithium is particularly sensitive in Latin America, which suffered greatly from the exploitation of its subsoil during colonization. With the return of the left to power in many countries in the region, the subject has become an important political issue.

This is true in Bolivia, Mexico, but also in Chile, where the new president Gabriel Boric, 36, is considering the creation of a public company: “Lithium is the mineral of the futuredid he declare. Chile cannot again make the historic mistake of privatizing these resources, and for this purpose we will create the national lithium company, generating jobs in the deposits and a Chilean seal on our products. »

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