Ganfeng eyes strategic investments in Sonora lithium project

China-based Ganfeng Lithium said it would welcome investments by US automotive firms in the US$420mn Sonora lithium project in Mexico (pictured).

Ganfeng is advancing a planned takeover of UK-based JV partner Bacanora Lithium, which would give it full control of Sonora, Mexico’s largest and most advanced lithium project.

“We are open to having strategic investors in our Mexico project, together with investment we could have an offtake agreement with them,” Ganfeng vice chairman Wang Xiaoshen was reported as saying by trade publication Benchmark Minerals.

An investment by the likes of Ford, GM or Tesla would help establish a North American supply chain for battery raw materials, according to the report.

The comments follow confirmation by Bacanora of a 12-month delay at Sonora, where first production is now planned for 2H24.

Sonora is expected to produce 17,500t/y lithium carbonate, rising to 35,000t/y in a later US$380mn expansion.

Ganfeng’s offer for Bacanora became unconditional in December after clearing a final condition, relating to Mexican antitrust approval.

At end-2021, Ganfeng had received acceptances on or already controlled 86.1% of Bacanora’s shares.

The offer will remain open for acceptance until further notice, Bacanora said in its 2021 annual report, released in February.

The Sonora project faces political challenges in Mexico, where President Andrés López Obrador’s (AMLO) leftist Morena administration is seeking approval for a bill that would bring resources of the battery metal under state control.

It is unclear what impact this would have on existing concessions, such as those at Sonora.