EconomyFinancialReform to the Mining Law: AMLO proposes the creation...

Reform to the Mining Law: AMLO proposes the creation of a new body and no longer grant lithium concessions

President Andrés Manuela López Obrador kept his word. The president has sent the document to nationalize lithium and it revolves around two main axes: the creation of a new body to lead the exploitation of the mineral and a refusal to grant new concessions.

The document may not encounter major obstacles: its approval only requires a simple majority in both chambers, which Morena has. And it could be voted on as soon as today, according to the latest announcements by the president and the Chamber of Deputies.

The president has argued in the initiative that the change to the Constitution has become necessary as part of the path towards the energy transition. Lithium The document states that lithium and “other minerals that, as science and technology evolve, should be excluded from the generic mining system” and should be granted a special legal treatment different from that currently contained in the Mining Law.

The content of the initiative has not come as a surprise. These changes were contained in the electricity reform that was rejected yesterday in Congress and the president had already announced, in one of his many morning conferences, the creation of a state company for the exploitation of lithium and had reiterated his disagreement with the concessions granted previously. His administration has also already halted the issuance of new concessions. “This and other minerals that were considered strategic for economic or technological reasons should not be the subject of concessions, contracts, assignments, permits or any other administrative or private law act that removes them from the nation’s heritage.”

A new decentralized body and no more concessions

The document rules out issuing any license, permit or assignment related to the mineral. But it does not touch any of the previously granted concessions. Despite the fact that large reserves are presumed, the country has not seen results from them, all the deposits are still in the exploration phase.

This Monday in his morning conference the president has compared the new body that will be in charge of the extraction of lithium with the Federal Electricity Commission (CFE), but the document that is already in the Deputies today does not give more details. The president has said that it will be a state company, which will be accompanied by research centers and “with the experiences of other countries.”

The initiative reads that it will be a decentralized public body that will have control and administration of lithium and other minerals. The Mexican Geological Service, says the document, will help the new state company to locate and recognize the geological areas where the mineral could be found.

The president has also closed the door to private participation in the exploitation of the mineral. The opposition had asked that private parties have the opportunity to be part of the activity with a mechanism similar to the oil rounds, in which companies could bet capital, but that the State maintain control.

But the president has dismissed it and has been blunt: “In Mexico there are activities that, due to their importance, correspond to the nation, and this, through its representative authorities, has the power to exclude them from the general rules of the market”, the initiative says. “Private capital is prohibited from participating in mining allocations related to lithium.”

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