AMLO announces creation of “Litio para México”

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Lithium ore falls from a chute onto a stockpile at a Talison Lithium Ltd. facility, a joint venture between Tianqi Lithium Corp. and Albemarle Corp., in Greenbushes, Australia, on Thursday, Aug. 3, 2017. Rising Chinese demand for lithium-ion batteries needed for electric vehicles and energy storage is driving significant price gains and an asset boom in Australia, already the world's largest lithium producer. Photographer: Carla Gottgens/Bloomberg

Mexican President Andrés Manuel López Obrador has formalized the creation of the state-owned lithium company Litio para México (LitioMx) via decree as an entity under the control of the energy ministry (Sener).

The announcement, published in the federal gazette on Tuesday, one month later than officials had originally proposed, is key advance in the project as envisioned by the president and approved by congress in April.

As stated in the decree, the object of LitioMx “is the exploration, exploitation, processing and use of lithium, located in national territory, as well as the administration and control of the economic value chains of said mineral.”

The decree established LitioMx as a sector-specific entity under Sener charged with coordinating with Sener’s vice ministry for planning and energy transition with the intention of achieving the goals set out in Mexico’s energy transition law.


As declared, the company’s CEO will be a presidential appointment based on the recommendation of the energy ministry.

The company’s board of directors will have five voting members comprised of executive branch appointees, namely, the energy minister, finance minister, economy minister, interior minister and the head of environmental agency Semarnat.

This concentration of political appointees at the helm stands in contrast to how the boards of Mexico’s state-owned companies have been established in the past. 

Previous administrations set up the boards of state-owned enterprises with ministers often joined by company executives, independent business advisors and, in some cases, representation of workers.

PRIVATE SECTOR PARTICIPATION

Section VII of article 13 stands out in the decree, granting LitioMx the ability to “associate with other public and private institutions … to administer and control the activities necessary for the production, transformation and distribution of products derived from lithium.”

While this seems to leave the door open to private sector participation, questions remain over LitioMx’s involvement moving forward, particularly with respect to pre-existing private projects under development.

The decree went into effect on Wednesday, starting the clock on a 180-day window for the company to begin operating.

Source: BN Americas

Mexico Daily Post