World’s largest lithium mine will impact on geopolitics

The mine, whose construction began in 2018, will go into production by the first half of 2020 and will be able to produce 17 500 tons / year of lithium carbonate in its first phase, before moving to 35 000 in the second exploitation phase for a total life of 19 years.

The mining concession is held by a joint venture made up 77,5 percent by the English- speaking company Bacanora Ltd and the remaining 22,5 percent by the Chinese Ganfeng Lithium.

Lithium is an alkaline metal that occurs naturally in the form of brine – or precipitates of concentrated solutions – and of minerals such as carbonates, hydroxides and inosilicates, that is, it derives from the alteration and erosion of minerals such as spodumene or petalite.

High concentrations of lithium are found in brackish waters (0,03 – 0,3 percent lithium chloride), particularly in the deserts of California, and to a lesser extent in sea waters. Therefore in nature it is not in the metallic state, due to its remarkable reactivity (it oxidizes easily).

Lithium finds various applications, including medical, nuclear (for the production of tritium) and war (lithium oxyhalogenes are used in missile batteries), but its use has increased according to new technologies in the electronic field: the metal is used to produce more efficient electric batteries.

Lithium, in fact, allows a greater energy density per unit of volume, a longer useful life, a lower weight, a high capacity operation at lower temperatures and a longer storage time for energy compared to other types of batteries.

Together with other elements, such as rare earths (lanthanum, cerium, neodymium), present in countless products both from our everyday life and from military or highly specialized uses (such as magnets, superconductors, turbines, lasers, missile and satellite guidance systems), or the minerals of the platinum group (called Pgm), has unleashed a real “gold rush” among the major mining companies in the world.

In detail, the global consumption of lithium is used in 39 percent of cases by battery manufacturers, 30 percent by the glass and ceramic industry and for the remaining part in various sectors such as air treatment, polymer production or of lubricating greases.

If we analyze the data on batteries better, we find that these are produced at 25 percent for the automotive sector and for 19 percent for mobile phones or smartphones; 16 percent ends up in laptops while another 16 percent in electric bicycles, increasingly on the market.

It is estimated that the global consumption of batteries of this type has increased by 23 percent per year in the period from 2010 to 2015, from 21 GWh (gigawatt hour or a billion watts/hour) to 60 GWh for an overall market value, including rechargeable and non-rechargeable batteries, amounting to 10,7 billion dollars a year.

These numbers are certainly destined to rise thanks to the automotive sector alone that is seeing a progressive increase of the demand for hybrid or electric cars: + 69 percent in 2015.

Before the discovery of the Mexican field, the countries with the largest reserves of lithium were Bolivia, Chile, Afghanistan, Australia, the United States and China. In particular, the United States, with the mine in Humboldt County (Nevada), ranked first in probable reserves (179,4 million tons) followed by Australia with Port Hedland (151,9 million tons) and by Pilgangoora lithium – tantalum project (108,2 million tons) also in Australia.

The exploitation of the Sonora field, and possibly other lithium deposits that have been identified in Baja California, in San Luis Potosí and Zacatecas, will project Mexico’s role at the center of global geopolitical interests.

Already the fact that the Chinese Ganfeng has secured almost a quarter of the exploitation of the largest lithium field in the world, should make it clear how the country of Central America will become strategic for controlling the market for this resource, which Beijing is trying to secure by becoming partner in almost all the lithium (and rare earth) deposits in the world.

Potentially, Mexico could become one of the major producers of this resource and benefit from it by becoming an exporter not only of the same raw material, but also of its derivative products, taking advantage of its own geographical position that makes it a natural bridge between the economies of northern America (highly technological) and southern (developing and producing raw materials).

The United States will find it increasingly difficult to manage their “neighbour” and thanks to this discovery, will greatly diminish the political weight of Washington that currently plays from positions of strength – also due to internal instability – with Mexico City.

Thus, the question of the wall, for example, whose costs the White House claims are partly covered by the Mexican government, could waver in the face of the United States’ need to buy this resource, if only to remove it from China’s grasp.

Another scenario could see Washington moving directly into action trying to control Mexican lithium production directly, perhaps even using the internal instability caused by the war on drug cartels as a pretext, says analyst Paulo Mauri.

President Trump recently considered the “hypothesis of counting the narcos among terrorist groups” and this would open up scenarios in which US soldiers could be deployed on the borders with Mexico and also employed in operations, clandestine or overt, across the border, perhaps to “protect” the mines and the production of this important resource.

Even China could decide, in the face of greater internal instability, to protect its interests, which as we have seen are already present in the country, to “militarize” the mines and even build Chinese “enclaves” on Mexican territory: a strategy put in place by Beijing already elsewhere, as in Africa.