Lopez Obrador nationalizes lithium mining in Mexico.

MEXICO CITY, Feb 18 (Reuters) – Mexican President Andrés Manuel Lopez Obrador signed a decree on Saturday transferring responsibility for lithium reserves to the Ministry of Energy, after nationalizing lithium deposits last April.

During an event in Sonora, López Obrador signed the decree ordering the Ministry of Energy to "take the necessary steps to carry out" the nationalization process.

It also designates 234.855 hectares (907 square miles) in Sonora as a mining zone known as Li-MX 1.

“We are going to make the nation the owner of this strategic mineral,” López Obrador said during the event.

Mexico possesses significant potential deposits of lithium, a highly sought-after material for the production of electric vehicle batteries.

Studies suggest that Mexico may have around 1,7 million tons of lithium. Although about a dozen foreign companies have active mining concessions aimed at developing potential lithium deposits, Lopez Obrador said that all of them will be "reviewed," which has cast a cloud over the sector's future prospects.

"What we are doing now... is nationalizing lithium so that it cannot be exploited by foreigners from Russia, China, or the United States," López Obrador said at the event.

Last week, the CEO of the state-owned lithium production company, Pablo Taddei, told Reuters that Mexico was open to partnerships, but that the federal government would have a majority stake in any future joint venture.

The decree published Saturday by the Ministry of Economy states that "the rights and obligations of the holders of mining concessions in force located in the lithium mining reserve zone remain protected."

It adds that "no mining activity related to lithium" can be carried out within the reserve, but gave few further details.

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