Analyzing the Feasibility of Lithium Extraction in Mexico: Supply Chain Modeling with Economic and Environmental Considerations

Abstract

Lithium is a strategic resource due to its use in rechargeable batteries for electric vehicles and electronic devices, driving high demand for extraction. This study analyzes the lithium supply chain in Mexico, focusing on both the extraction of lithium carbonate for export and the potential for producing lithium–ion batteries and lithium grease, considering their environmental impact. The proposed mixed integer linear programming (MILP) model, solved using the GAMS modeling environment, suggests that lithium extraction in Mexico is viable, with Sonora having the greatest extraction capacity. Three solutions were evaluated: Solution A maximizes profits (USD 317.19 M) but has high greenhouse gas (GHG) emissions (1,119,808 tons), Solution B balances profits (USD 186.98 M) with lower emissions (559,904 tons), and Solution C prioritizes emission reduction (44,792 tons) at the cost of lower profits (USD 48.20 M). Solution C implies a scenario with severe environmental restrictions, which indirectly leads to lower investment costs by avoiding the production of lithium grease and batteries. This study highlights the potential impact of tariffs on U.S. lithium exports, with a 25% tariff making exports economically unviable. This underscores the need for Mexico to diversify its export markets. Decision-makers can use this model to explore alternative strategies, reduce dependence on a single market, and optimize the economic and environmental sustainability of the lithium sector.