Ganfeng Lithium's First-Half Profit Falls, Mexico Project Uncertainty Weighs

By P.R. Venkat

Ganfeng Lithium's first-half net profit fell 19% from a year earlier, weighed down by high operating costs that overshadowed revenue growth at one of the world's largest lithium producers.

Net profit for the period ended June was about 5.9 billion yuan ($810.4 million), while revenue rose 26.5% to CNY18.11 billion, the company said late Tuesday.

Revenue grew mainly because of higher sales of lithium metal, compounds and batteries.

Ganfeng Lithium also gave an update on the Sonora lithium project in Mexico, in which it is a joint-venture partner.

The Chinese company said that in August, Mexico's General Directorate of Mines had issued a notice to its subsidiaries in Mexico indicating that nine lithium concessions they had been granted had been canceled. Ganfeng said it believes that the subsidiaries have complied with the minimum investment obligations, as required under the country's laws.

The company said it has been proactively engaging with the government and relevant authorities about a potential collaboration on the Sonora project that still respect's the group's rights, it said.

It said the cancellations aren't final, but uncertainties remain.

"There is still uncertainty as to whether the above-mentioned matters may cause the company to incur asset impairment losses, and whether they may have a certain negative impact on the results of the company," Ganfeng said.

Write to P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

August 29, 2023 21:16 ET (01:16 GMT)

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