But beyond the obvious The federal administration has placed two transitory articles that, from the legal analysis, could be taken as contradictory: in one, the government affirms that the rights and obligations of those who have a mining concession in the area are protected; In the second, it says that mining activity with respect to lithium cannot be carried out in the reserve. So far, no company has started mining the mineral.
The one that had the most concrete progress is the Chinese Ganfeng Lithium, which until recently was still on the eve of receiving the necessary permits to begin construction of the infrastructure in an area known as La Ventana and which has delayed the start of the production phase on more than a couple of occasions.
And lawyers don’t quite know how to interpret the decree that came into effect last Sunday. The document, they say, opens the door to the withdrawal of some of the rights granted to companies with a concession where there could be lithium and reinforces the idea that those reserves where the mineral is will only be exploited by the State. Over the weekend, the governor of Sonora, Alfonso Durazo, said that state-owned LitioMx is open to association with Mexican and foreign companies, a claim that seemed far off until recently, when the federal government had vetoed, at least since the speech , any private participation in the metal production and exploitation chain.
The opinion that is raised in unison is that with this document the secrecy continues to be maintained regarding the next steps to be taken regarding the exploitation of lithium. “It seems that with this decree they are giving indications of how they plan to do it (exploit the metal), although it remains quite laconic and the effects are a bit contradictory,” says Fernando Quesada, a partner lawyer at the Cortés Quesada law firm.
“(The decree) is a contrast, interpreting it very conservatively and from a strictly legal point of view, what it is doing is freezing all that area declared in the decree for any expropriation of lithium, so that, eventually, it is the Mexican government who carry out the extraction activities, except those portions that have already been covered by another concession”, he adds.
A concept that worries
And there is a legal principle that worries the lawyers and the legal teams of the companies that have begun to work on the decree. The federal government has placed in the title of the decree the words “cause of public utility”, a concept included in the expropriation law and which is used as the main argument in the processes in which individuals are deprived of their assets arguing public interest.
The lawyers are divided between those who say that the concessions cannot be expropriated because it is not a physical asset, nor the companies that own the soil and subsoil for which they have the permits, and those who affirm that, despite this, with this decree the federal government would be opening the door to carry out these procedures at some point, if they see fit.
“It is still not clear that this decree intends to be expropriatory, that is, if it takes away the property or the right to extract that mineral from the private companies that are in those areas that are designated or if it is rather saying I will exploit these reserves directly or how they want to implement it”, a Baker McKenzie lawyer specializing in energy issues.
The jurists consider that the federal administration has intentionally maintained the ambiguity in the decree while they continue to outline the business model that will be used in the extraction of the mineral and the work that will be carried out by the state-owned LitioMx, whose figure has not yet been defined at all.
“I believe that the reason why the temporary ones are so laconic is precisely because the federal government wants to keep the deck open, either to avoid getting into trouble with the existing concessions, but in its case to be able to expropriate them later for utility purposes. public, which is a term that comes in the decree and is important in cases of expropriation”, explains Quesada.