The nationalization of lithium opens up a series of questions about the future of mineral exploitation in Mexico, a country that is among the top ten in the world ranking of those with the most resources in its territory.

The ruling party Morena acted quickly in the Mexican Congress after the setback caused by the legislative rejection of the electricity reform, which placed limits on private expansion in power generation and favored the growth of the state Comisión Federal de Electricidad (CFE)º. The shock led President Andrés Manuel López Obrador to characterize opposition legislators as "traitors to the country".

The echoes of that snub had not ended when Morena gave speed to the project that reformed the Mining Law and managed in a very short time that both the House of Representives and the Senate approved the official text without changes.

The doubts. The legal text that entered into force on April 20 states that the Mexican State will be the only one authorized to explore and exploit lithium in the country. The law declares the exploration, exploitation and use of lithium to be of public utility, in addition to preventing licenses and private contracts for the exploitation of the mineral, which will be the sole responsibility of the State through a new decentralized body, Litiomex.

As a consequence of the new ruke, López Obrador announced that the federal government will initiate the review of all contracts between private parties that have lithium as a subject. Mexico does not yet have any commercial production of the mineral, but there are projects in the exploratory phase in Jalisco, Guanajuato, Nogales, Sonora and Puebla. The star of the lithium projects is the lithium field Sonora, which some consider to be the largest in the world, with resources of 243 million tons and reserves of 8.8 million, and which is managed by Bacanora Lithium, a firm controlled by the Chinese company Ganfeng Lithium. Bacanora has a permit to extract 35,000 tons per year of lithium carbonate.

All eyes have been on this specific case, since it is expected that there will be some degree of conflict there. According to lawyers specialized in mining law consulted by the Mexican press, by imposing the criterion of public utility, the Mexican government would be anticipating its intention to expropriate the lithium mining concessions that have already been granted. In that sense, these specialists point out that the recently approved reform could be contradictory with the international treaties that Mexico has signed, especially the one that renewed Nafta, with the United States and Canada. They even affirm that since it is a legal and not a constitutional reform, it could be questioned in the Mexican courts.

For the Cámara Minera de México (Camimex), the "uncertainty" generated by the sanction of the reform could make Mexico lose the power to attract investments of US$24.2 billion for new mines in the next six years.

The other question, also raised by the private sector, points to the State's capability to manage the exploitation of lithium. According to this perspective, the State has already demonstrated its ineffectiveness in similar activities and they point to the situation of Pemex and the CFE itself as concrete examples of that insolvency. They warn that the nationalist discourse does not solve the technical problems of an exploitation that appears complex.

According to Camimex, to build a medium-sized mining company, an investment of around US$300 million is needed, in addition to investment in exploration.

The reality is that, in the first place, there is not a strong investment in mineral exploration in general, nor in lithium in particular. The government has not mentioned so far what its plan is on this issue; For example, the Mexican Geological Service budget continues to be US$2.4 million for this year.

Another problem has to do with the type of lithium that has been found in Mexico. According to researchs made, it is the type known as "clay", with a very low concentration of lithium salts, between 0.1 and 0.5%. This implies two consequences. First, expensive techniques are required to separate lithium from sandstones; the second, that a mineral concentrator is needed to make Mexican lithium useful for the manufacture of batteries.

Lastly, by excluding the private sector that extracts lithium globally, Mexico could be left out of the global value chains for that mineral, which are made up of mining companies, carbonate transformers and the battery industry. According to this view, the capital flow goes where investment is facilitated, not where it is limited.