Concession Cancellation Delays Ganfeng Lithium's Extraction Plans

Following the cancellation of Ganfeng Lithium's mining concessions for lithium extraction, the China-based company announced an indefinite suspension of its plans to initiate mineral extraction. This setback represents a significant obstacle to lithium extraction in Mexico, as no company has managed to produce any lithium in the country, thus far.  

On Oct. 4, 2023, MBN reported that the General Directorate of Mines (DGM) explored the possibility of canceling Ganfeng Lithium’s concessions due to non-compliance with the minimum investment obligations between 2017 and 2021. As a response, the company said the investment amounts made within that period exceeded the minimum Mexican laws ask for.

Due to the cancellation of the concessions, Ganfeng Lithium’s Mexican Subsidiary, Bacanora Lithium, has suspended the development of its plant in Sonora. According to Peter Secker, CEO and Director, Bacanora Lithium, the project's schedule was altered and put on hold once the government expressed its intention to cancel the concessions. Secker mentioned that the project will remain paused until both parties reach a resolution. However, he emphasized that there is currently no clear timeline for the conclusion of this process.
 

According to Secker, the construction of the plant is valued at US$800 million dollars. The company expected to start activities by 2023. However, the construction had not even started in due time, making this goal impossible to achieve as construction would take at least 18 months to complete, as reported by Outlet Minero. 

Secker denied the government’s accusations of not complying with minimum investment levels and said the company will take all available legal measures to avoid the cancellation of its concessions. Ganfeng’s legal challenge adds to the current 500 amparos promoted by Mexican and foreign mining companies against the Mining Law reform before the Supreme Court (SCJN), as reported by MBN. 

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