Those who ignore the predatory and with impunity ways in which transnational corporations have operated across seas or across land borders for centuries – and still today! – Exploiting Latin America’s natural resources and reaping the biggest dividends, becomes the meaning of the move a few years ago in Mexico.
With the nationalization of lithium and the nearly 235,000 hectares of the state of Sonora representing the nation’s largest mineral deposit, President Andrés Manuel López Obrador put a stamp on mining law reform that declared this mineral a heritage of the nation last year and the exclusive resource of the Mexican people, noting that the exploration, exploitation, exploitation and use of lithium are “the sole responsibility of the state.”
Though somehow “blessed” by renewed interest in its resources from European investors – one of the few “favorable” balance sheets left by Latin America’s conflict over Ukraine and the West’s punitive measures against Russia – the region’s role as one of the Net exporter of commodities continues to assign it a dependent role.
According to the Economic Commission for Latin America and the Caribbean (Cepal), Latin American exports grew 20 percent last year, “reduced” by the rise in hydrocarbon and food prices brought about by the European conflict… something that only of course benefits the producing nations.
But even for them, the increase will not be enough if the profits are not used, for example, to finance the change and efficiency of production structures or to drive the energy transition in search of clean energy sources. .
One must also think of industrialization, as Bolivia naturally proposed with its lithium, with China’s investment cooperation; however, under the aegis of the Bolivian Ministry of Hydrocarbons and Energy (MHE) and the state Yacimientos de Litio Bolivianos.
Sonora’s lithium reserves are highly sought after by the automotive and telecommunications industries. Photo: Portal
This requires the capital that can appease a consistent exploitation of natural resources in the hands of the nation states.
More elementary and less ambitious, the gains from a reasonable exploitation of natural resources can even be the first income to achieve social justice when invested in people.
It’s not a new argument. In 1938, Mexico itself came knocking with the nationalization of its oil, decreed by General Lázaro Cárdenas: a revolutionary measure that rolled back the 2013 energy reform under neoliberal vision in favor of foreign private companies. This turn was to be reversed by the electricity reform proposed by López Obrador last April; but opposition in Congress would not allow him to advance.
For this reason, the nationalization of lithium now apparently had to be regulated by presidential decree. Would all the benches have agreed to it during the legislative period and before an election year?
But Mexico wasn’t the only Latin American country making efforts to protect its natural resources. In 1971, Salvador Allende’s Chile nationalized copper, the nation’s most important wealth, giving the state 100 percent control over the exploitation of large existing and yet-to-be-discovered mineral deposits. Fifty years later, however, and in the context of the drafting of a new constitution, proposals are emerging to “renationalize” copper…
It is understandable. After the Pinochet dictatorship and the neoliberal governments that gave way to “democracy”, only 30 percent of production is in the hands of the state-owned National Copper Corporation of Chile (Codelco). The rest is dominated by the domestic and foreign private sector, with the presence of global companies such as BHP, Glencore, Anglo American, Freeport McMoRan and Antofagasta.
Another milestone in this matter came in 2006 with the well-known nationalization of hydrocarbons in Bolivia and the renegotiation of gas extraction contracts dictated by Evo Morales, a move that filled the state’s coffers and consequently changed the face and economy of a country, which from then on was one of the richest and the one with the largest and most sustained growth in Latin America and until then appeared in international economic and financial reports after Haiti as one of the poorest.
Ecuador followed Bolivia. In a stipulation that wasn’t exactly portrayed as nationalization, in late 2009 Rafael Correa’s board of directors presented to the foreign oil companies operating in the country a new contract model that saw the state as the owner of 100 percent of the crude oil produced, and he hired those companies with his exploitation, so he paid them for their services.
According to this concept, the profit correlation, which until then was favorable for the promoting companies, was reversed, which was as high as 80 percent! the production.
The Ecuadorian authorities of the time rightly argued that it was about “reaffirming the concept of sovereignty”.
Of course, there are enough arguments to welcome Mexico’s decision to confirm the state’s authority over the exploitation of lithium, a world “most advanced” mineral with “a life ahead” in the context of the quest for clean and renewable energy and, temporarily, the current boom in automotive transportation without the use of fossil fuels.
Signing the decree, López Obrador precisely pointed out the need to start now in search of technologies that allow efficient exploration and exploitation, a task from which apparently private companies could not be exempted, but always with the state Head.
Although there are voices in the opposition who have tried to downplay the decree’s value and give it an electoral character as López Obrador’s six-year term comes to an end, the truth is that this intent to make political gains will only be rewarded can be yourself. AMLO has reiterated that he is not seeking re-election.
In any case, the first steps towards recycling have already been taken. Since last September, the company Litio para México (LitioMex) has been created, a decentralized public body whose mission is the exploration, exploitation, exploitation and exploitation of lithium located in the national territory, as well as the management and control of the economic value chains of said lithium mineral. Although her mission has only just begun, it is stated that she has the power to enter into contracts with other entities.
López Obrador’s wish is for battery manufacturing plants to also emerge, preventing Mexico from becoming a theater of pure extractivism and allowing him to sell the “finished product”.
Connoisseurs place the country tenth on the list of nations identified as having lithium deposits, with two percent of the world’s proven reserves.
The López Obrador government estimates that exploitation at Sonora could reach production of 17,500 tonnes of lithium carbonate per year beginning later this year. Production could double by 2026.
The figures are not negligible and, due to their financial magnitude, affect the degree of sovereignty that they will contribute to the economic development and thus the preservation of Mexico’s independence.