Doubts linger over Mexican state lithium firm despite proposed budget hike for 2025

Mexico's draft spending budget for 2025 includes an allocation of 12.9mn pesos (US$635,000) for state-owned lithium company Litio de México (LitioMx), nearly a third higher than the 9.8mn pesos allocated to the firm by the finance ministry for this year.

Despite the increased budget proposed for the firm created in August 2022, the future of LitioMx after the so-called "nationalization" of the strategically important metal remains uncertain considering the changes expected to be made by the government of President Claudia Sheinbaum and by state oil company Pemex.

LitioMx is expected to become a unit of Pemex, whose new CEO, Víctor Rodríguez, reported in a call with investors at the end of October that the company is studying the creation of two subsidiaries, Pemex Litio and Pemex Energía Verde. However, the strategy for the use of lithium and other strategic materials would initially be worked on internally, together with LitioMx.

"We are going to work in accordance with the instructions of the President of the Republic on a partnership with LitioMx. We are going to work hand in hand with them and also with the ministry of economy in the area of the Mexican geological service," Rodríguez was quoted as saying by newspaper Reforma.

This is the second year in which public funds have been allocated to LitioMx, whose responsibility is the planning, standardization and implementation of programs, projects and actions for the exploration, extraction and use of lithium in national territory, as well as the execution of strategies with other organizations in the public and private sectors.

According to the work report from the energy ministry (Sener), from September 1, 2023 to June 30, 2024, LitioMx was legally and administratively consolidated to operate efficiently, optimizing human, financial and material resources.

Sener reported that during this last year, channels of cooperation were established with state power utility CFE and electricity and clean energy institute Ineel to prospect geothermal areas with potential for lithium brine production.

According to figures from the United States Geological Survey, Mexico had 1.7Mt of lithium reserves in 2023, representing nearly 3% of the world's total reserves. However, to date, commercial extraction has not begun and the projects being considered are all in the exploration phase.

The only lithium deposit in the country with proven reserves is located in Sonora state in northwestern Mexico, where nine concessions belonged to Chinese mining company Ganfeng, but they were cancelled by the economy ministry earlier this year, leading the firm to launch an arbitration case against the government.