‘White gold’ is again centre stage in Latin America after Mexico passed a reform in April to nationalise the valuable mineral. Lithium, a soft, silvery-white alkali metal, is crucial to the production of lithium-ion batteries for electric vehicles, solar and wind technologies, telecommunications, aerospace and military equipment, portable electronics and more. The international energy agency named lithium as the mineral with the fastest growing demand due to its predicted role in the transition from oil and gas to rechargeable battery technology. Its market is set to double to $8bn by 2027 while it is estimated that global demand will rise 40-fold over the next 20 years.
Mexico’s president Andres Manuel Lopez Obrador (AMLO) and his National Regeneration Movement (MORENA) are now in their fourth year of a six-year term. While AMLO has failed to deliver on his campaign promise to preside over Mexico’s ‘fourth transformation’ by undoing the damage done by decades of neoliberal government, he has campaigned for greater state control over the country’s natural resources. Mexico holds sizeable reserves of oil, precious metals and minerals; attempts to roll back the privatisation of oil and electricity carried out under previous governments have faced stiff resistance from foreign and domestic private interests and their backers in Mexico’s political elite. Whilst MORENA and its allies hold a majority of seats in the Chamber of Deputies and Senate, a coalition of opposition parties holds enough seats to block the two-thirds majority vote required for constitutional reforms under Mexico’s bicameral system.
On 17 April, the opposition was therefore able to block MORENA’s electrical reform, which sought to amend the constitution to reduce private foreign interests in Mexico’s oil, gas and energy projects. However, by submitting an amendment to a bill on mining, which required only a simple majority, AMLO was able to pass legislation declaring the exploration, exploitation and use of lithium to be ‘of public utility’. The amendment bans direct private involvement in lithium production and legislates instead for a state-owned enterprise ‘with the state guaranteeing rights related to lithium exploration, including living in a healthy environment and indigenous rights’. This is significant. Though hailed as the future of ‘clean’ energy, the mining of lithium contaminates water, air and soil while drawing heavily on local water supply.
Whilst Mexico does not yet produce lithium commercially, it holds an estimated 1.7 million tonnes of lithium reserves, the tenth largest in the world. There are eight mining concessions for lithium extraction in various stages of exploration with the most advanced project, run by China’s Ganfeng lithium, on track for extraction by 2023. All contracts will now be reviewed. The lithium reform will now face a string of lawsuits as private investors scramble to bring Mexico’s lithium back into the private sphere and guard against other countries following suit. British investors will be following developments. ‘Green Lithium’ is building Britain’s first commercial lithium refinery and is set to be supplied by Trafigura, a Swiss commodity trading company headquartered in Singapore which has a Metals and Minerals Trading regional hub in Mexico City.
Days after driving through the lithium reforms, AMLO announced plans to create a ‘lithium alliance’ with Bolivia, Chile and Argentina to protect Latin American interests. Bolivia holds the world’s largest lithium reserves. Chile is the second biggest producer of lithium and Argentina is the fourth. Together they form South America’s ‘lithium triangle’, holding nearly 60% of the world’s known supplies. The 2019 coup in Bolivia that forced President Evo Morales and the Movement for Socialism from power came shortly after Bolivia launched its own electric vehicle and pledged to retain majority state control over lithium production. Although defeated the following year by the Bolivian people, the coup exposed powerful economic interests pouring money into political destabilisation. Elon Musk, the world’s richest man whose Tesla electric cars depend on lithium, gloated about his role in supporting the coup, tweeting at the time: ‘We will coup whoever we want! Deal with it!’.
The battle over lithium is a new front in the battle against US imperialism’s hegemony in the region. There have been victories for leftist candidates like Xiomara Castro in Honduras, Gabriel Boric in Chile and the re-election of Daniel Ortega in Nicaragua. Gustavo Petro of the progressive Historic Pact is set to win May’s presidential elections in Colombia and Lula leads polls for Brazil’s presidential contest in October. Some 20 Latin America and Caribbean countries have now joined China’s Belt and Road initiative. With the US facing US increasing isolation in the region, AMLO – who has in the past vacillated, making a string of concessions to US imperialism – is under pressure to respond to the rising current of progressive forces in Latin America. An example is Mexico joining the principled stand taken by the CARICOM Caribbean countries, Bolivia and Honduras in boycotting June’s Organisation of American States’ (OAS) summit after the United States banned socialist Cuba, and the radical governments of Venezuela and Nicaragua from attending. The OAS was created in 1948 as a right-wing alliance to counter communist influence in the Americas and has long been a bastion of US interests backing coups, destabilisation attempts and endorsing sanctions. Mexico will instead host an anti-imperialist ‘Workers’ Summit’ in Tijuana on the same dates as the OAS summit.
Visiting Cuba as part of a tour of the Caribbean and Central America, AMLO called for the deepening of friendship between Cuba and Mexico and an end to the US blockade. He advocated for Latin American unity, stating ‘We should build something similar to the European Union, but based on our history, reality, and identities…we should not rule out the elimination of the OAS in favour of a truly autonomous organisation that is not a lackey of anyone’.
Sam Mcgill
