Column: Top five contrarian commodity scenarios for 2025
Overall, the first part of 2025 is likely to be defined by a period of uncertainty.
Mexico will not be able under the law to cancel concessions for China’s Ganfeng Lithium in the government’s bid to tighten control over its potentially lucrative lithium reserves, the president of Mexico’s mining chamber said on Wednesday.
Lithium giant Ganfeng said in a late August filing that Mexico’s mining authorities had issued a notice to its local subsidiaries indicating nine of its concessions had been canceled.
Last year, the Mexican government enacted a sweeping lithium nationalization aiming to ensure the country profits from surging demand for the ultra-light metal, coveted by rechargeable battery makers across the globe.
“I do not belief it is possible to cancel concessions under the law,” said mining chamber head Jaime Gutierrez.
Concessions granted before the lithium nationalization should not be altered, as the law is not retroactive, he added.
Mexico does not yet produce any lithium despite indications it could hold rich deposits of the metal.
One of the concessions canceled is for an open-pit project in the state of Sonora, the company said, containing an estimated 8.82 million metric tons of lithium carbonate equivalent.
Mexico put Ganfeng’s concessions under review and requested evidence that its local subsidiaries had complied with investment obligations from 2017 to 2021, the company said in the filing.
The evidence was submitted in May, but authorities still decided to cancel the concessions, Ganfeng added.
Mexico’s economy ministry did not immediately reply to a request for comment on the canceled concessions.
Since he took office in late 2018, President Andres Manuel Lopez Obrador has refused to offer any new mining concessions, arguing that too many had been granted by previous governments.
Lopez Obrador last year created a national lithium company to kick off projects, whose head, Pablo Taddei, said it could partner up with private companies for developments as long as the government holds the majority stake.
Mexico’s proposed 2024 budget, currently being discussed by lawmakers, gives 9.8 million pesos ($552,352.29) to the company, an amount deemed “short” by Gutierrez.
($1 = 17.7423 Mexican pesos)
(By Valentine Hilaire; Editing by Kylie Madry and Marguerita Choy)
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