Ganfeng to Prioritize High-Return Projects in the Short-Term

Ganfeng Lithium has announced a delay in investments for projects that do not offer substantial short-term returns, following a loss for 1H24 amid a downturn in the lithium industry. Despite postponing investments in medium- and long-term projects, Ganfeng announced it will continue acquiring global resources, with future expansions being guided by lithium demand.

For 1H24, Ganfeng reported a net loss of ¥760.4 million (US$107 million), a sharp decline from the profit recorded in the same period in 2023. The company was significantly impacted by the turmoil in the lithium market, characterized by an oversupply that has exceeded demand from electric vehicle manufacturers. This oversupply has squeezed profit margins, forcing companies to reassess expansion plans, cut costs, or shut down operations. UBS Group AG has forecasted that the lithium market will remain oversupplied until at least 2027 and has cut its price forecasts by up to 23%.

Ganfeng 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).