Legislative Setback To Electrical Reform In Mexico. New Target: Lithium

In Short

The Situation: In 2021, Mexican President Lopez Obrador proposed a Reform Initiative to transform the electricity sector in Mexico by transferring control of the sector to the state and imposing onerous restrictions on private investment.

The Result: President Lopez Obrador's initial plan was to amend both the existing Electric Industry Law and Mexico's Constitution. Lately, the Reform Initiative has suffered legislative setbacks in Mexico's district courts and the House of Representatives. In response, President Lopez Obrador has shifted his strategy to targeting the lithium mining sector, which he is attempting through a proposal to modify Mexico's Mining Law so that lithium remains the absolute property of Mexico. Such changes will likely have a harmful effect on foreign investors involved in lithium concessions in Mexico.