Mexico plans defense in Ganfeng arbitration before international courts

Mexico will resort to international litigation to defend itself against the arbitration China's Ganfeng Lithium initiated after the cancellation of nine concessions for the Sonora lithium project last year.

During a recent press conference, President Andrés Manuel López Obrador did not specify further, but said that “litigation is taking place because we consider that lithium belongs to the nation. They had previously been given that concession and we consider that it was given in a generic way, not specifically for lithium, but for mining. We think it does not apply that this claim is being made.”

Emphasizing that the government was still trying to reach an agreement with Ganfeng, he added that “three months ago, the person in charge of Chinese diplomacy was here and I discussed the issue with him, and there has to be an agreement because lithium has been nationalized and we do not want private companies to participate. Yes, some partnership can be implemented, but with the predominance of national interest, in the case of lithium.”

Ganfeng International Trading, together with Bacanora Lithium and Sonora Lithium, filed international arbitration against the government with the World Bank's International Centre for Settlement of Investment Disputes.

Ganfeng is among China's leading battery manufacturers and lithium miners. To date, there is no commercial production in Mexico of the ultra-light white metal that is key to the manufacturing of rechargeable batteries.

In November, Ganfeng said the economy ministry confirmed the cancelations of the concessions.

The probable reserves of the Sonora lithium carbonate deposit amount to 8.8Mt.