British company Cadence Minerals reported that together with its subsidiary REM Mexico Limited (REMML) issued a request for consultations and negotiations to the Mexican government under the Bilateral Investment Agreement between the UK and Mexico (BIT), for the withdrawal of mining concessions for Sonora Lithium Project.

Cadence Minerals reported that the concessions granted to Mexilit and Minera Megalit were impacted, as they are joint ventures in which Cadence owns 30 percent of the shares through REMML.

In the application, Cadence and REMML identified several BIT obligations that Mexico violatedincluding not taking over investors’ investments great Britainas well as the obligation to treat these investments fairly and equitably.

Pursuant to Article 10 of the BIT, Cadence and REMML have requested consultations and negotiations with Mexico with a view to resolving disputes peacefully. “The BIT provides for disputes to be resolved through international arbitration if the dispute cannot be resolved through consultation and negotiation,” the company said.

Cadence and REMML Hiring Leading International Law Firms Clifford Chance as counsel for the BIT process. The team specializes in mining-related investment treaty arbitration cases.

Cadence CEO Kiran Morzaria told the team at Clifford Chance has many years of experience in mining-related investment treaty arbitration and has successfully resolved similar cases in the past.

“With your guidance, we hope so Constructive solutions can be achieved through consultation and negotiation with Mexico under BIT, the manager said.

Changes to the Mineral and Coal Law

In April 2022 and May 2023, the Mexican government approved the modifications Mining Law, which banned lithium concessions and declared it a strategic sectorgrants the State exclusive rights to participate in lithium mining operations.

The company has indicated that there will be reforms to mining laws will not apply to pre-existing concessionsincluding Mexiliths and Megaliths.

“The position of Ganfeng Lithium (one of the Sonora Litio Project partners) and Cadence is like that These reforms cannot impact project concessions because it was given before the enactment of mining law reforms,” ​​the company said.

At that time they explained that The Mexican subsidiary met its minimum investment obligationsas required by Mexican law.

“In fact, the investment in mining development was carried out by a Mexican subsidiary has significantly exceeded minimum investment obligationsaccording to the Mexican subsidiary’s report submitted to the Directorate General of Mines for the 2017-2021 period.”

The companies involved have indicated that the Mexican government did not raise any objections until the government notified Ganfeng Lithium that the minimum investment obligations were allegedly not fulfilled and taking steps to cancel lithium concessions.

PMA