Regional Lithium Policy in Extremadura and National Tiring Tensions
In a formal move, the Council of Ministers endorsed a request to the Head of Government to challenge an objection that was deemed unconstitutional. The dispute centers on a decree from Extremadura that would mandate the treatment of lithium resources and reserve their use for battery factories situated within the region. The underlying aim is to keep economic benefits tied to the local area, a principle that has sparked friction with the central government.
On August 31 of the previous year, the Extremadura regional executive, led by Guillermo Fernández Vara, approved an autonomous regulation to safeguard the use of lithium reserves within the community. The rule seeks to regulate lithium mining activities across the region, ensuring that the cycle of extraction, processing, and production remains inside Extremadura’s borders.
The core objective of the regulation is to retain industrial gains within the region. Practically, this means lithium deposits located in Extremadura—home to some of the EU’s most significant lithium mines—would be available exclusively for battery production in factories located in the community. This approach has been described as a form of regional protectionism and has met resistance from the central government.
The Executive argued that the Council of Ministers, during an extraordinary session convened to dissolve the courts after an electoral call, views mining as property of the public domain. In this framework, national wealth is owned by the State, and the autonomously granted rights could be seen as a challenge to the centralized powers that govern mining, energy policy, and civil law—notably the equality and property principles involved.
Furthermore, the central administration warned that the proposed arrangement would impose obligations on sellers and presuppose a market structure that runs counter to the ideas of free enterprise. It contends that the plan could undermine the state’s role in economic planning and free competition, thereby challenging the authority of the state in public procurement and related matters. There is also concern that it could breach European regulations that govern cross-border trade and public market rules.
In the weeks leading to the approval of the regulation, public statements by regional leaders raised questions about collusion with local battery manufacturers. Rumors suggested a direct plan to source lithium from Cáceres, specifically Navalmoral de la Mata, for a battery plant. However, the regional head of the Junta denied any such arrangement, insisting that the region’s moment had arrived to advance its own industrial trajectory rather than merely responding to external incentives.
The European Union has projected a substantial upscaling in demand for lithium and cobalt to support the growing market for electric vehicles and energy storage. Some estimates indicate that by 2030 demand could rise by as much as eighteen times for lithium and five times for cobalt compared with current levels, with even larger projections for 2050. These forecasts underscore the strategic importance of securing a reliable domestic supply chain for advanced batteries (attribution: European Commission projections, 2024).