AMLO charges ahead with nationalisation of Mexico’s lithium

AMLO charges ahead with nationalisation of Mexico’s lithium

Briefly: Mexican President Andres Manuel Lopez Obrador (often known by his initials, AMLO) signed a decree on Saturday, officially handing responsibility for Mexico’s vast lithium reserves to the country’s energy ministry. This move effectively kicks off the lithium nationalisation process that AMLO announced last year.

A Li-ttle context: Lithium is a core battery input that’s key to the energy transition, so it’s charged with geopolitics. And Mexico is sitting on $600B of the stuff, so foreign companies have flocked to Mexico like finance bros to a Patagonia vest. But AMLO’s policy means all foreign mining concessions will now be placed “under review”. And this has foreign mining executives sweating like… finance bros overheating in a Patagonia vest.

Intrigue’s take: AMLO, who rarely leaves Mexico, clearly has his eye on domestic politics here. But that doesn’t mean he’s ignoring the geopolitical angle. He said Mexico must “nationalise lithium so that it cannot be exploited by foreigners from Russia, China or the United States”. So this particular nationalisation is ‘non-aligned’. But if Mexico’s struggling oil sector is any guide, it’s hard to see its lithium sector thriving without foreign partners.

Also worth noting:

  • The majority of Mexico’s lithium reserves are held in clay soils, but companies have yet to devise a commercially viable process to extract the precious metal from the clay.
  • Between January 2021 and January 2023 the price of lithium carbonate traded in China (the world’s #1 lithium buyer) rose by more than 1000%.
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