ICC Supports COFECE on Sonora Lithium’s Purchase
The International Chamber of Commerce in México (ICC México) has expressed its support to the Federal Commission for Economic Competition (COFECE) for authorizing the acquisition of the Sonora lithium deposit by a Chinese company, saying that it acted within its scope of competence. This comes in after President Andrés Manuel López Obrador heavily criticized the COFECE for this purchase.
As a result, MORENA’s senator, Alejandro Armenta Mier, denounced COFECE for “treason to the country” for approving the sale of the concession of the Sonora lithium deposit to Chinese company Gangfeng Lithium. Nonetheless, ICC México coincides with the Ministry of Economy, institution in charge of applying the Mining Law and Foreign Investment Law.
“In this sense, it is the COFECE’s job to analyze the transaction between the two foreign companies, Gangfeng International Trading and Bacanora Lithium, faculties given to the Commission by the Federal Law of Economic Competence, with the objective of protecting and guarantying free competition in this market,” reported the Commission.
In addition, ICC México indicated that COFECE studied if the transaction between the two foreign enterprises could decrease, damage or impede free market competition. “It is responsibility of the Ministry of Economy to analyze and resolve its terms and conditions.” It was the government that previously authorized the concessions.
Gangfeng lithium and Bacanora lithium shared the concession of the Sonora Lithium deposit and the process was supervised by COFECE.
COFECE responded and approved the purchase because it did not represent any risk to competitors or consumers. In addition, the commission explained that Mexico´s laws allow national and international investments, for which Ganfeng Lithium had the right to request an acquisition. Despite the explanation, the president has continued to disapprove of COFECE's actions and stressed that the US had reproached Mexican authorities for this purchase because China is considered the US´s biggest commercial competitor. López Obrador said he does not want to enter into international conflicts and that these permissions must not be approved to avoid misunderstandings.
The ICC urged the government to appoint the missing commissioners for the COFECE, which usually operates with seven members and is currently managed by four. “The absence of these appointments has begun to limit the correct performance of this important institution,” alerted the chamber. For instance, the Federal Law of Economic Competition establishes the need of five votes to resolve certain economic competition procedures, and right now there are only four commissioners.”