Column: Trump 2.0 won’t reverse Biden’s critical minerals push
Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
Mexico’s move to restrict all future lithium licenses to the state won’t stop China’s drive to secure supplies of a mineral that’s key to making electric-vehicle batteries.
Bacanora Lithium Plc, the company being acquired by China’s Ganfeng Lithium Co., said it’s plowing ahead with construction of Mexico’s first mine even after President Andres Manuel Lopez Obrador laid out plans to stop granting contracts to private companies.
The president’s lithium proposal — part of a bill that would give Mexico’s state utility more power and reduce competition — comes amid a global uptick in resource nationalism that threatens to slow supply growth needed to feed the transition toward electrified economies.
READ: Bacanora Lithium says Sonora project safe from Mexico reforms
But Bacanora sees enough in the proposal submitted to Congress last week to carry on with development given early construction work had already started. “The mine remains on track to commence production in 2023,” the London-listed firm said by email.
That’s good news for Ganfeng, the Chinese lithium giant that agreed to buy Bacanora in August as the Asian nation steps up efforts to lock in supplies of battery metals. Chinese lithium carbonate prices have surged to record levels.
Still, the move to exert more state control in Mexico generates greater regulatory uncertainties for both existing license holders and future investors in all extractive industries, especially in the nascent lithium sector.
There are more than 31 lithium exploration concessions granted by previous governments, but no industrial exploitation or commercialization. Bacanora has 10 mining concession areas in Sonora state.
To be sure, regulatory headwinds in Mexico will be of little immediate consequence for the global market given the country is expected to account for just a small fraction of lithium supply in the coming years.
(By Alvaro Ledgard)
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