By Anthony Harrup


MEXICO CITY--Mexico's congress has passed a bill reserving lithium deposits and mining activities for the state, excluding the private sector from what is expected to be a fast-growing industry as demand for electric vehicles increases.

The Senate voted 87-20 Tuesday in favor of changes in the mining law, which were approved in the lower house on Monday with 298 votes in favor and 197 abstentions.

Reserving lithium for the state as a strategic mineral had been part of a broader electricity-sector bill that was rejected in the lower house on Sunday, since the ruling party and its allies lacked the two-thirds majority needed to amend the constitution.

President Andrés Manuel López Obrador submitted a separate bill to change the mining law, which required only a simple majority to pass.

Under the changes, all lithium exploration and development will be the responsibility of a government enterprise to be set up within months.

Mexico has no current commercial lithium operations, although a number of concessions have been granted, including a large project in northwestern Sonora state, Bacanora Lithium, owned by China's Ganfeng Lithium Co.

"We are continually reviewing any proposed changes in legislation and continue to meet all obligations to maintain the validity of all of our mineral concessions," Bacanora Lithium had said in February in its 2021 annual report.

Mr. López Obrador said Tuesday that the government will review existing lithium concessions.

Mexico's mining industry chamber said that prohibiting private capital in minerals the government considers to be strategic creates uncertainty for existing and future mining operations in the country.

The exclusion of the private sector will also hinder development of a lithium industry in Mexico, the chamber said Tuesday. "Unfortunately, the reform...leaves out the private sector which has the experience and resources to contribute to the exploitation of this mineral."

Mr. López Obrador said the need for lithium in the energy transition away from oil makes it strategic.

"We will develop the technology, or acquire it, but the lithium is ours," he said.


Write to Anthony Harrup at anthony.harrup@wsj.com


(END) Dow Jones Newswires

04-19-22 2213ET