China’s Ganfeng Lithium Files Arbitration Against Mexico Over Lithium Project

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Ganfeng International Trading, Bacanora Lithium, and Sonora Lithium, all subsidiaries of China’s Ganfeng Lithium, have filed an arbitration case against the Mexican government over the cancellation of mining concessions for a lithium project in the country.

The case, which was posted on the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) website, centers around Mexico’s most advanced lithium mining project located in northern Sonora state. The project was initially developed by Bacanora, which was acquired by Ganfeng in 2021.

In August, Mexican mining officials canceled the concessions, citing that Ganfeng had failed to meet minimum investment requirements. However, Ganfeng disputes this decision and argues that it complied with all necessary regulations.

The nationalization of Mexico’s lithium sector in 2022 allows private firms to exploit the metal only in partnership with LitioMx, a newly established state-owned miner. The move was championed by Mexican President Andres Manuel Lopez Obrador.

Ganfeng is a leading global battery maker and lithium miner, and the project had significant potential for commercial production of the ultra-light white metal, which is crucial for rechargeable batteries.

The arbitration case follows Ganfeng’s November announcement that Mexico’s economy ministry upheld the cancellation of the concessions. Bacanora, Ganfeng, and the Mexican economy ministry have not responded to requests for comment on the matter.

The dispute highlights the complexities surrounding lithium mining in Mexico, which has the potential to become a significant player in the global market, currently dominated by miners in Australia, Chile, and China.

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Source: Reuters