Mexico eyes bigger role in lithium industry, sees speculation in mining concessions

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador gestures during a news conference at the National Palace, in Mexico City, Mexico February 23, 2021. REUTERS/Henry Romero/File Photo

MEXICO CITY (Reuters) - President Andres Manuel Lopez Obrador said on Wednesday the Mexican state is considering taking a bigger role in lithium production, arguing companies were using mining concessions for speculation rather than mining the metal.

Speaking at a news conference alongside his Bolivian counterpart, Luis Arce, Lopez Obrador was asked for his views about mining companies selling stakes in lithium projects in Mexico even as his government put a stop to new concessions.

The question made particular note of an announcement in November that Chinese company Ganfeng Lithium Co Ltd would increase its stake in Bacanora Lithium’s Sonora project in Mexico from 22.5% to 50%.

“We are analyzing the possibility of having a bigger participation in the exploitation of lithium,” Lopez Obrador told reporters, noting that “too many” mining concessions had been handed out before he took power at the end of 2018.

This, he said, had occurred “not to produce gold, silver, copper or lithium, but basically, though it may sound incredible, to speculate.”

Lithium has been in high global demand due to its increasing use in batteries for products such as electric cars.

Earlier this month, Lopez Obrador said his government was studying a proposal by a lawmaker in his ruling party to nationalize lithium production in the country.

Bolivia’s Arce said it was clear to him that the economic objective of the 2019 ousting of his ally, former President Evo Morales, was to gain control of Bolivian lithium reserves.

Arce said his government was restarting talks with Germany over developing the lithium industry, and noted that it could be useful to explore working with other countries too.

Reporting by Dave Graham; Editing by Sonya Hepinstall