Ganfeng Lithium has acquired the Sonora lithium clay project in Mexico by acquiring the entire remaining stake in Bacanora for up to £190 million (approximately RMB 1.556 billion). Prior to the acquisition, Ganfeng Lithium already held a 17.41% stake in the project.

Sonora project, according to the feasibility study report, its total lithium resources equivalent to about 8.82 million tons of lithium carbonate equivalent, this scale makes it one of the world's leading lithium resource projects. Ganfeng Lithium originally planned to commission 20,000 tons of lithium hydroxide in 2024.

However, since April 2022, the Mexican government has passed an amendment to the mining law in April 2022 and May 2023, which is known as the "mining law reform". The core elements of the reform include banning lithium concessions, positioning lithium as a strategic resource, and granting exclusive rights to its exploitation and operation to a state-owned entity.

Upon learning of this reform, Ganfeng Lithium quickly communicated with the Mexican government, emphasizing that its concession for the Sonora project was granted prior to the reform and therefore should not be affected by the new regulations. This position is based on the relevant provisions of the Mexican Constitution.

However, in August last year, the Mexican General Directorate of Mines issued a notice to Ganfeng Lithium's three holding subsidiaries in Mexico canceling the nine lithium concessions it held, including the key Sonora project.

With regard to the reasons for canceling the concessions, the DGM noted that Ganfeng Lithium's Mexican subsidiaries had failed to meet lower investment obligations. However, Ganfeng Lithium disputes this, claiming that they have invested in the development of the mine well in excess of the lower standard required by law, and have submitted annual reports to the General Directorate of Mines on time for the years 2017 to 2021, reporting on operations in detail. Ganfeng Lithium emphasizes that the Mexican government has never raised any questions about its investment or operations during this period.

In order to safeguard its rights and interests, Ganfeng Lithium has filed an application for administrative reconsideration with the Mexican Ministry of Economy.