Top China Lithium Firm Files International Claim Against Mexico

(Bloomberg) -- Ganfeng Lithium has filed an international arbitration case against Mexico after the Latin American nation canceled a potential mining project valued at more than $1 billion.

Efforts by Ganfeng, China’s top lithium firm, to build Mexico’s first commercial lithium mine were upended by 2022 legislation championed by President Andres Manuel Lopez Obrador who sought to nationalize the sector to prevent foreign countries from exploiting a strategic resource. 

Ganfeng bought Bacanora Lithium Ltd. in 2022 when the latter was embarking on development of an open-pit mine and processing facility in Sonora state that would have churned out 35,000 metric tons a year, giving the country a homegrown source of lithium for its fast-evolving electric vehicle supply chain. 

Work was put on hold following the passage of a bill in April 2023 to give the state total control of lithium mining. The Chinese firm had sought to form a public-private partnership.

After years of trying to resolve the matter in local courts, Ganfeng registered a case June 21 at the World Bank’s International Centre for Settlement of Investment Disputes, with Mexico’s Economy Ministry listed as the respondent.

©2024 Bloomberg L.P.