The Day at a Glance | April 20 2022

The Top

*The Senate approved changes to the Mining Law in order to regulate lithium extraction.

*ECB could increase interest rates as soon as July in light of inflationary risks: Martins Kazaks, member of the ECB.

*The People`s Bank of China decided to maintain one year preferential loan interest rate unchanged (3.7%).

*China assured that it will continue to strengthen strategic links with Russia.

*Japan`s trade deficit increased more during March as a result of a weak Yen.

Economic environment

Senate approves Mining Law changes. After just 24 hours of its approval in the Chamber of Deputies, the Mexican Senate approved the changes to the Mining Law proposed by the Executive power in order to regulate lithium mining and extraction in the country. With this, lithium was nationalized and there will be no lithium concessions and will be left under State control. All lithium value chains will be administered and controlled by the State; exploration, and its commercialization will only be carried out “for Mexico`s people”. The changes made to the Law establish that the Executive power will determine – within 90 working days after its approval – a decentralized public body that will be in charge of administrating and controlling activities in the lithium industry. President Andres Manuel López Obrador assured in a press conference that current contracts will be looked at in order for activities to align with the new regulation. He even spoke about canceling contracts, even though these processes weren’t part of the passed bill. The President`s goal is to look over concessions granted by the previous administration, particularly in the state of Sonora. The lithium industry is developing in Mexico and it`s estimated that at least 18 states have mineral deposits – used for the production of batteries, pharmaceuticals, synthetic rubber, air conditioning systems and used as an input in the production of aluminum and glass. Lithium is considered to be one of the most important metals for the production of technology and essential infrastructure for the global transition towards cleaner energies, along with copper, nickel and cobalt.