Sonora Lithium Project Not at Risk: Ganfeng LithiumBy Paloma Duran | Tue, 04/26/2022 - 11:19
After President López Obrador announced that granted lithium concessions will be reviewed, Ganfeng Lithium assured that the Sonora Lithium project mine is not in danger and remains on schedule for its first production.
Last week, López Obrador explained that since the Mining Law’s reform was approved, the legality of the eight permits granted to national and foreign private companies will be reviewed to see whether they are maintained or suspended. Likewise, he announced that Bacanora Lithium and Ganfeng Lithium's Sonora Lithium Project is the main lithium project to be reviewed, especially since the Federal Economic Competition Commission (COFECE) recently authorized its full acquisition.
Ganfeng promised that the Sonora Lithium mine complied with all applicable Mexican laws and regulations, so the company expects the concession to remain in force. It also announced that it is further analyzing the Mining Law’s reform to identify the possible effects on the project and highlighted its desire to maintain a good relationship with the government, since the Sonora Lithium project can bring many benefits to Mexicans.
“Ganfeng hopes to work with the government and the authorities to continue with this investment, which is subject to all applicable laws, regulations and modifications for the benefit of all Mexicans. The Sonora project promises enormous benefits in terms of employment, development and wealth. In addition, it can cooperate with other lithium projects to supply the country's automotive sector," the company told Forbes.
Ganfeng said that despite the uncertainty, the first production of the Sonora Lithium project scheduled for 2H24 remains on track as maintaining concessions remains viable. Recently, Bacanora Lithium recently announced that its first production would be in 2024 instead of 2023, as previously planned. Although the company did not explain the reasons for the delay, experts believe there could be more delays if the government does not agree that the company has complied with all regulations, as reported by MBN.
Currently, the Sonora Lithium project is Mexico’s main lithium prospect. The production of the US$420 million development is expected to be around 35,000 tons per year. If achieved, Mexico will have the status of a major international producer, said Reuters.
On April 19, President López Obrador's new initiative to reform the Mining Law was approved after reaching a simple majority in Congress. The initiative modifies articles 1, 5, 9 and 10 of the Mining Law to grant the State exclusive control of the exploration and production of lithium. Experts warned that the reform and the cancellation of concessions, in addition to driving investment away from Mexico, will lead to more lawsuits and precautionary measures against the government, since it will violate international treaties.