Mexico working to avoid legal confrontation with private miner after nationalizing lithium industry

The Mexican government is negotiating an agreement with a lithium mining company to avoid a legal confrontation, after the government nationalized the industry, President Andres Manuel Lopez Obrador said Jan. 24.

The mining company obtained a mining permit to operate in the border state of Sonora from the previous administration, he said during his daily morning press conference.

However, the current government wants the company to renounce the option of mining lithium, as the government is preparing to grant an exclusive concession in the area to a newly-created state company, the president said.

Although the private company may have a permit for mining, it does not have other permits for the use of water or for the environmental impact of the activities, needed for it to operate, he said.

Obrador did not mention the name of the company, but according to official filings, the only company that was given a permit during the last administration is a subsidiary of Guanfeng Lithium of China.

Gangfeng did not respond for comment requests.

"We are looking for a negotiated solution to avoid a legal process," the president said, adding that exploration activities conducted by the company are reduced to a very small area.

The concession to the newly-created company, called LitioMx, will be awarded during a presidential visit to the area in mid-February, Obrador said.

Sonora Plan

The idea to establish a lithium industry in Sonora is part of a broader scheme to bring development to the area so it can integrate with the southern states of the US like California and Arizona, Obrador said.

The scheme, known as the "Sonora Plan," hopes the state can eventually produce lithium batteries for the auto industry and is expected to attract a total investment of almost $50 billion in the coming years.

The president mentioned that the Sonora Plan also considers the development of clean energy in the region to support the auto industry and said that the 1GW solar plant being built in Puerto Peñasco is part of that goal.

Four more solar plants of similar size are being considered as part of the plan, as well as new transmission lines and highways, he said.