President Andrés Manuel López Obrador announced that he intends to get investment from the United States and Canada to produce lithium batteries and renewable energy in northwestern Mexico.
The lithium exploitation project found in the Sonoran Desert is part of the renewable energy development initiative called “Plan Sonora,” launched by the president this year.
“Plans are being made to finish resolving the concessions,” said López Obrador in a press conference on November 14. “It was decided that the lithium belongs to the country… There must be an association between the public company and by private parties, and we don’t want lithium to be taken from Sonora,” he said, referring to the Mexican state that borders Arizona and New Mexico.
Plano Sonora seeks to develop renewable energy, such as solar energy in Mexico’s northwest region, and to begin developing the abundant lithium in the area, especially to be used in batteries for the car industry, through a public company.
The government plans to launch an initiative “to see which US and Canadian companies will participate” on the condition that the minerals, and the factories that make batteries from them, stay in Sonora.
According to the US Geological Survey, Mexico ranks ninth in global lithium reserves, accumulating 1.7 million tons of the desired mineral.
“Lithium remains in Sonora, that is, the raw material, the mineral. A commitment will be made to build plants for the production of batteries in Sonora. Batteries will only be used in the automotive industry that has -installation in Sonora,” said López Obrador.
Since its announcement in August 2022, the federal government has considered Plan Sonora as a source of infrastructure improvement in the region and a path to strengthen the integration of Mexico’s development with the US economy through USMCA trade agreement.
Initially, the project proposed the construction of a “solar energy generation park,” which envisages the construction of five solar plants in the two states of Sonora and Baja California.
A 279,000-panel The solar plant is currently under construction in the city of Puerto Peñasco, Sonora. To date, the power plant has required an investment of USD $497.7 million, with construction being carried out by Mexico’s state-owned energy company, the Federal Electricity Commission (CFE).
The plan also envisions expanding the power grid toward the northern border and providing the US with clean energy produced in Mexico.
In his press conference on November 15, López Obrador explained that the project currently requires the cooperation of the government of President Joe Biden to build five plants, provided that two conditions are met:
First, the rates obtained from US loans must be lower than current commercial rates, and CFE will act as the majority shareholder for five solar plants.
Lopez Obrador expects the Biden administration to commit to $5 billion in investment over the next two months.