AMLO Keeps Lithium in His Sights After Mexican Power Bill Snub

(Bloomberg) -- Mexico’s nascent lithium sector remains in the cross-hairs of Andres Manuel Lopez Obrador even after the populist president lost a battle to bring the industry under state control as part of an energy reform.

The government will review existing contracts for extraction of the key battery metal, AMLO, as he’s known, told reporters Tuesday, singling out a project run by China’s Ganfeng Lithium Co. to build Mexico’s first mine, in Sonora state.  

The president’s comments are the latest blow to private investment in an industry that’s crucial for transitioning away from fossil fuels. While Mexico has yet to produce lithium commercially, previous governments granted permits including to Bacanora Lithium Plc, later bought by Ganfeng. It’s also a sign of growing resource nationalism around the world as governments look to gain more control of and profits from the key component in rechargeable batteries.

AMLO spoke on the same day as the Senate debates whether to give the state control of the mineral after the lower house approved a fast-tracked bill Monday. The president sees lithium as a strategic resource that should belong to the nation, nuch like oil. 

“All of the contracts with lithium authorization will be reviewed,” he said. “No contracts for other minerals will be suspended. Those will still be valid. This is about lithium, not silver, not gold, not copper.”

A previous effort to nationalize lithium failed as part of an energy bill that was voted down Sunday. But AMLO said the government was reviewing whether the Ganfeng project had been granted the necessary permits to operate and whether a proper consultation with local communities had been conducted.

The president has previously said there were eight permits given to companies for lithium exploration and they would be allowed to operate if they met certain requirements, though at the time he doubted that most would be eligible. 

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