AMLO’s Consolation Prize Lithium Bill Passes Congress

Photo: Desert Fog


Just two days after the congressional defeat of his controversial electricity reform bill — which would have prioritized state-run carbon-based energy sources over clean private-sector sources — Mexico’s Senate on Tuesday, April 19, passed Andrés Manuel López Obrador’s (AMLO) “Plan B” lithium bill as a political consolation prize for the president.

The new bill, which will ensure that all of Mexico’s lithium reserves remain in the hands of the government, was sent by the president to the lower house Chamber of Deputies on Sunday night, where it was fast-tracked on Monday, April 18, and immediately forwarded to the Senate for final passage.

The lithium bill is essentially a modification to Mexico’s already-existent mining law.

Unlike the now-defunct electricity reform bill, which would have required a rewriting of the Mexican Constitution and, hence, a two-thirds majority vote, the lithium bill easily passed Congress, which is dominated in both houses by AMLO’s leftist National Regeneration Movement (Morena) party, with a simple majority vote.

But like the heated,13-hour deliberation that preceded the electricity reform bill vote, the pre-lithium debate was buckled with angry and offensive insults from both Morena and opposition senators, who accused each other of being traitors to the nation, as well as having been born to unwed mothers (in much more offensive terminology).

Late Tuesday night, the insults subsided and the bill passed, specifying that all exploration, exploitation and use of lithium would henceforth be declared a public utility.

Notwithstanding, the lithium bill changes little since, under the previous mining law, all of Mexico’s minerals reserves were already under the jurisdiction of the government.

That point was duly noted during the debate by opposition Institutional Revolutionary Party (PRI) Senator Mario Zamora Gastélum, who pointed out that the bill’s passage “did nothing more than to nationalize something that was already nationalized.”

Moreover, although it is believed that Mexico may possibly have the largest lithium fields in the world, with as much as 244 million tons of unproven reserves having been discovered by the UK-listed company Bacanora Lithium at Bacadéhuachi in the northern state of Sonora in 2018, that lithium is neither pure nor easily accessible.

Also, both exploration and exploitation of lithium is extremely expensive, and requires complex technology that Mexico does not possess.

Without private investment and imported know-how to develop successful lithium production in Mexico, the reserves will never be exploited.

Before the passage of the new bill Tuesday, the Chinese mining company Ganfeng Lithium had the rights to about three-quarters of the lithium in Sonora, and there were an addition eight concessions granted by previous governments for the possible extraction of lithium in other parts of the country.

Still, with the exception of Ganfeng, which is the world’s largest lithium producer and the main supplier to the U.S. electric carmaker Tesla, none of these companies have invested in or begun exploration of Mexico’s alleged lithium reserves.

The new bill will presumably nullify these concession contracts, thus opening Mexico up to an array of potential international lawsuits.

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