Mexico’s 2026 budget limits lithium investment and slows energy transition

The proposed federal budget for 2026 puts lithium exploration in Mexico on hold and jeopardizes the future of the energy transition, Rigoberto García, a researcher at El Colegio de la Frontera Norte (Colef) specializing in energy, social, and environmental issues, told BNamericas.

The Mexican Geological Survey (SGM ) will have approximately 1.24 billion pesos (US$67 million) for expenses and physical investment, a figure similar to that of 2025, while LitioMx will receive only operating resources of approximately 14 million pesos, just 1 million pesos more than what was allocated for this year, according to the project.

Of the amount allocated to the SGM for 2026, 1.179 billion pesos will be allocated to current expenses and 57.4 million pesos to physical investment, primarily in public works and movable and immovable property.

While the total cut is just 0.5% compared to what was approved for this year, the 80% drop in physical investment is notable, when exploration is an activity that traditionally requires billions of dollars annually and which, following the reform to the Mining Law in May 2023, was granted exclusively to the SGM, making private participation difficult.

“It’s obvious that with this, lithium exploration and exploration activity are impeded for 2026, that is, denied, because there’s no budget,” García said. He added that the approved spending reflects “the priorities of each government” and in this case, neither lithium nor the energy transition are seen as central priorities.

The researcher pointed out that the exclusivity granted to the SGM for exploration work in 2023 is unfounded if sufficient resources are not allocated. Various industry associations have repeatedly warned in recent years that without exploration, there is no mining, including lithium mining.

The strategic white metal was nationalized during the previous administration of Andrés Manuel López Obrador, in April 2022, which sparked international litigation with companies such as the Chinese Ganfeng, to which the authorities canceled nine concessions of the Sonora project, which presented the greatest progress, preventing activities in that deposit.

Regarding possible solutions, García acknowledged that the current government maintains a limited approach toward private participation, although he considered public-private partnerships could be a viable option.

“Government investment is also needed. It’s not just about the private sector contributing,” he said. “I think we need a revised regulatory framework to attract investment. I’ve spoken on several occasions with people connected to the mining sector, and they don’t even view public-private partnerships negatively,” he asserted.

A mining sector representative, who preferred to remain anonymous, acknowledged to BNamericas that the amounts allocated to SGM and LitioMx remain “penalized” due to their low levels, but said he expects changes to come soon due to the need for strategic minerals and thanks to negotiations through the mining chamber Camimex, although he did not provide details.

BNamericas learned from two sources, who cannot reveal their identities, that the regulations for the amended Mining Law are expected to be published this September. A first draft has already circulated in the sector, and it is hoped that this will clarify many doubts that have so far effectively impeded some operations, especially exploration, for companies. BNamericas has not been able to verify the existence of this draft.

Finally, the Colef researcher warned that Mexico runs the risk of falling behind in the global lithium chain and in the manufacturing of components for electric batteries. “We should, I insist, be working more seriously, because otherwise, the train will pass us by and we won’t be able to take advantage of it,” he concluded.

(The original version of this content was written in Spanish)