Lithium plays a crucial role in the global energy transition, which involves the shift from internal combustion vehicles, which use gasoline, to electric vehicles that rely on lithium-ion batteries.
Although various lithium deposits have been identified in Mexico, the particularities of these, which are in the form of clays, raise questions about their viability for exploitation. In this context, the task of exploring new deposits, which has been entrusted to the Mexican Geological Service (SGM), is emerging as a complicated challenge, especially given the budget limitation.
“It is a very short investment that is projected for exploration. The SGM has been working in a very limited way. They have been able to detect some deposits, but there is no way to know if they would be profitable or not, for this it is necessary to do a series of studies, sampling, etc., and that requires a much larger investment,” adds Jaime Gutiérrez, president of Camimex, at the request of Expansion.
The investment amounts in exploration work by private companies are higher, compared to what is allocated by the Federal Government for lithium deposit exploration projects.
For example, the Canadian gold producer Equinox Gold will allocate 3 million dollars (about 53 million pesos) for exploration work in one of its mines within the Los Filos complex that operates in Guerrero. In the case of Endeavor Silver, it will allocate 2.1 million dollars (about 37.1 million pesos) in expenses to maintain exploration concessions, acquire mobile equipment for exploration and cover corporate infrastructure, according to Camimex’s Annual Report.
“The funds allocated to exploration exceed the federal government’s allocation, and it is important to highlight that the SGM’s efforts have been restricted in budgetary terms, not in technical terms,” said Karen Flores, director of the institution.
The cancellation of concessions to Ganfeng
On the other hand, and referring to the recent cancellation of Ganfeng Lithium’s nine concessions, Gutiérrez considers that, if the guidelines were met, “it is not possible that they will cancel the concessions regarding the law.”
“We consider that, if all current regulations are complied with, there is no justification to cancel the concessions, even when lithium has been declared of national interest. However, it is important to keep in mind that the law does not have retroactive effect. Therefore Therefore, we will have to wait and observe the development of the entire process,” he said in response to a request for Expansion.
The Asian company stressed that the cancellations are not yet final and emphasized that its investment levels have remained significantly above minimum requirements, ruling out any reason for the slowdown. The company also recognizes the uncertainty regarding possible losses due to asset impairment and its potential negative impact on the company’s results.