India Markets open in 1 hr 13 mins

Investors from five countries eye Mexico's nascent lithium market

MEXICO CITY (Reuters) - Investors from at least five countries have expressed interest in Mexico's nascent lithium extraction and production industry, said Francisco Quiroga, the undersecretary for mining, after a promising find in the north of the country.

The find is still in the exploration phase. If initial estimates of lithium deposits are confirmed, Mexico could emerge as one of the world's largest players in a thriving sector.

In January, the mine's two foreign operators estimated that it could contain 8.8 million tonnes of lithium. This would put Mexico on a par with Bolivia or Chile, whose mines have large known deposits.

Quiroga told reporters during an mining industry event in Mexico City that he had already met with investors from Canada, Germany, Japan, the United Kingdom and the United States to discuss potential opportunities.

"There's a lot of interest in participating," said Quiroga, adding that Mexico would seek out opportunities beyond simply extracting the metal, which is used to produce batteries for electric cars.

"What we're offering is more than the promotion of mining - but instead mining complimented by activities along the entire production chain, including manufacturing - and there's been a lot of interest."

Quiroga said there were still several operational, commercial and financial challenges, without giving details. British operator Bacanora Lithium <BCNB.L> and its Chinese partner Ganfeng <002460.SZ> plan to start production in 2021.

Two private companies are exploring other possible lithium deposits in the northern border state Baja California and the area straddling the central states San Luis Potosi and Zacatecas.

Elsewhere, the Mexican Geological Service has already registered possible deposits in the northern state Sonora and the central states Jalisco and Puebla.


(Reporting by Noe Torres; Writing by Stefanie Eschenbacher; Editing by Arun Koyyur)