Ganfeng Lithium Could Lose Dispute Over Concessions: Sheinbaum

President-elect Claudia Sheinbaum announced that she will continue the legal dispute against Ganfeng Lithium, stating there are sufficient grounds for the company to lose the arbitration and its lithium concessions. Previously, López Obrador had indicated that the government would seek to reach an agreement with the company.

The dispute stems from the approval of López Obrador's Mining Law in April 2022, which granted the State exclusive control of lithium exploration and production. Subsequently, López Obrador cancelled the concessions of the company, claiming that Ganfeng and its subsidiaries did not meet the required investment thresholds.  

Sheinbaum emphasized that the conditions of the concession make it likely for Ganfeng to lose the legal dispute, given its inactivity in the area. “This lithium reserve should belong to the Mexican people. With the nationalization of lithium, it must be incorporated into the Sonora Plan project, which includes not only lithium exploitation but also significant development initiatives for the region."

President López Obrador previously announced that his government would seek an agreement with Ganfeng Lithium while defending Mexico's rights amid the firm's arbitration case over a disputed concession. He stated that the concessions granted were too general, as they did not specifically mention lithium extraction, a mineral the government has labeled as strategic. To date, López Obrador has not provided details on a potential agreement to resolve the dispute.

Lithium in Mexico

Ganfeng’s Sonora Lithium project was originally scheduled to begin commercial production in 2023, officially making Mexico a lithium producer. However, political uncertainty has left the future of lithium exploration efforts in Mexico uncertain. On June 24, 2024, MBN reported that Ganfeng Lithium and two of its subsidiaries filed an arbitration case against the Mexican government with the World Bank's International Center for Settlement of Investment Disputes (ICSID).

According to a US Geological Survey's 2024 report, Mexico ranks ninth in lithium reserves with 1.7Mt. Despite Mexico’s lower lithium reserves, experts suggest that with the exploitation of economically viable deposits, Mexico could emerge as a major player in lithium production. However, the country faces two challenges. First, Mexico's lithium reserves are mainly in clay formations. Second, the government has limited the participation of private companies in lithium production.