China's Ganfeng files arbitration against Mexico over lithium deposit

MEXICO CITY (Reuters) -China's Ganfeng and two of its units aiming to develop a lithium project in Mexico registered an arbitration case against the Mexican government over the mining concession, according to the World Bank's dispute settlement center.

The post by the lender's International Centre for Settlement of Investment Disputes (ICSID) on its website was dated Friday, and lists the case, filed by Ganfeng International Trading, Bacanora Lithium and Sonora Lithium, as pending.

Shanghai-based Ganfeng is a top global battery maker and lithium miner.

The case centers on Mexico's most advanced lithium mining project, located in northern Sonora state, and follows legislation championed by Mexican President Andres Manuel Lopez Obrador that nationalized the country's nascent lithium sector in 2022.

The nationalization allows private firms to exploit the metal but only in partnerships with upstart state-owned miner LitioMx.

There is no commercial production in Mexico of the ultra-light white metal coveted by rechargeable battery makers. The market is dominated by miners in Australia, Chile and China.

The concessions would have allowed the company to develop the Sonora lithium project, but were canceled by mining officials in August, arguing that Ganfeng had failed to comply with minimum investment requirements.

Last November, China's Ganfeng Lithium Group said Mexico's economy ministry upheld the cancellation.

Ganfeng acquired the site's initial developer Bacanora in 2021, but more than a decade has passed since Bacanora acquired the Sonora mining concession.

Bacanora, Ganfeng and Mexico's economy ministry did not immediately respond to requests for comment.

(Reporting by David Alire Garcia; Additional reporting by Daina Beth Solomon; Editing by Kylie Madry and Rod Nickel)