Ganfeng Lithium, China’s leading lithium firm, has filed an international arbitration case against Mexico following the cancellation of a potential mining project valued at over $1 billion.
The project, initially spearheaded by Bacanora Lithium before its acquisition by Ganfeng in 2022, aimed to establish Mexico’s first commercial lithium mine and processing facility in Sonora state.
This venture was anticipated to produce 35,000 metric tons of lithium annually, crucial for Mexico’s burgeoning electric vehicle supply chain.
However, Mexico’s legislative changes in April 2023, driven by President Andres Manuel Lopez Obrador’s efforts to nationalize the lithium sector, abruptly halted progress on the project.
The new laws aimed to grant the state full control over lithium mining, derailing Ganfeng’s plans for a public-private partnership.
After exhausting local legal avenues to resolve the dispute, Ganfeng formally initiated arbitration on June 21, 2024, at the World Bank’s International Centre for Settlement of Investment Disputes. Mexico’s Economy Ministry has been named as the respondent in this arbitration case.
This move marks a significant escalation in the dispute, highlighting the complexities and challenges faced by foreign investors in navigating Mexico’s evolving regulatory landscape in strategic resource sectors.
