Bacanora聽Lithium (LON:聽BCN), which is聽being acquired by China鈥檚 Ganfeng Lithium,聽said on Monday that Mexico鈥檚聽proposed bill聽to declare lithium a 鈥渟trategic mineral鈥澛燼nd reserve聽its extraction聽for the state聽.听
Leftist聽President Andr茅s Manuel L贸pez Obrador聽聽a聽bundle of聽constitutional changes with the primary聽objective聽of strengthening the state electricity company.听
The proposed reforms, which include keeping lithium in聽the government鈥檚聽hands,聽will not affect聽licenses already granted to private companies, provided exploration work has already begun and all license requirements have been met, the President said.听
There are eight concessions granted for the possible exploitation of lithium in the country,聽he noted, adding that it聽was聽the understanding of the government that only one of them聽met聽the requirements to keep the project. The statement did not mention the company it聽referred to.听
Bacanora聽believes聽it聽satisfies the potential demands聽at its flagship Sonora lithium project, where it聽kicked off聽early construction聽in February.听聽Production of battery grade lithium is on track to start in 2023, with output estimated at 35,000聽tonnes聽of lithium per year, the聽company聽said, adding it would聽keep shareholders advised of any further developments.听
Ganfeng聽chief executive Wang聽Xiaoshen聽has expressed its reservations about the country鈥檚 plans for its lithium industry.听
鈥淣ationalization may not be a good idea; there are many bad examples of nationalization of resources,鈥� Wang聽said last year, when rumours of an imminent聽expropriation聽of lithium projects hit the wires. 鈥淎n example is Bolivia. There are big lithium resources there but for many years no project has been built because Bolivians don鈥檛 allow foreign companies to own mining properties. That鈥檚 a big hurdle for attracting investment.鈥澛�
Lopez Obrador鈥檚 ruling National Regeneration Movement (MORENA) and its allies lack the two-thirds majority in Congress required to pass constitutional changes, and some analysts are skeptical that he can achieve it.听
MORENA鈥檚 previous efforts to strengthen Mexico鈥檚 state-owned utility, the Federal Electricity Commission, have been blocked in courts because they appeared to violate a constitutional requirement for free competition in the sector.听
President L贸pez Obrador believes renewable energies remain out of reach to most Mexicans and has promoted instead聽the use of聽fossil fuels and large, state-run projects in the energy sector.听