Mexico to seek deal over disputed mining concession with Ganfeng

Mexican President López Obrador announced his government's intent to negotiate with the Chinese lithium miner following its arbitration case over a disputed concession.

Mexican President Andrés Manuel López Obrador said on Thursday that his government would seek an agreement with Ganfeng after the Chinese lithium miner initiated an arbitration case against the country’s government over a canceled mining concession for an advanced lithium project in the state of Sonora.

The request by Ganfeng, Bacanora Lithium, and Sonora Lithium was filed last Friday at the World Bank’s dispute settlement center, the International Centre for Settlement of Investment Disputes (ICSID).

The case centers around the government’s decision last August to cancel Ganfeng’s concessions. This move followed former President Andrés Manuel López Obrador’s nationalization of Mexico’s nascent lithium industry in 2022.

In 2021, Ganfeng acquired Bacanora Lithium, which was developing the mine worth $800 million.

The company’s goal was to commence commercial production in 2023. However, Mexican legislators approved a bill in April 2022 granting the state full authority over lithium mining, and activities were halted.

López Obrador suggests that the dispute with Ganfeng stems from confusion over how previous governments granted concessions.

“That’s because we believe that the country had previously issued, and we believe issued (mining concessions) in a generic manner, not specifically for lithium but rather for mining, and we don’t think it applies,” he said.

There is currently no commercial production of lithium in Mexico.

López Obrador, whose term as president ends in September, noted that public-private partnerships for lithium projects are permitted.

The Sonora project included an open-pit mine and processing facility expected to produce 35,000 tonnes of lithium annually.

(With files from Reuters)