Mexico robs Chinese companies, worse than India!

Livestock Corps 2024

2024-06-27 22:50Creators in the field of finance and economics

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01Ganfeng Lithium's concessions to nine major lithium mines in Mexico were all cancelled by the Mexican General Directorate of Mines on the grounds that they did not meet the minimum investment requirements.

In August 022022, Ganfeng Lithium spent £190 million to buy the entire equity of the Sonora lithium project from a British company, preparing to produce lithium carbonate in Mexico.

03However, due to Mexico's amendment to the "Mining Law", lithium mines are regarded as national strategic resources, and the "lithium mine monopoly" is implemented, all of which are contracted to a Mexican state-owned enterprise.

04In addition to Mexico, Chile also forcibly confiscated part of Tianqi Lithium's shares, requiring Tianqi Lithium to hand over 85% of the profits of the lithium mine project in which Tianqi Lithium participates to the Chilean government.

05Due to the deep influence of "Che Guevara" in South America, it is destined to be an uneven road for Chinese companies to go overseas to control overseas lithium mines.

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Overseas equity of Chinese companies has been robbed again. But this time the looter was not India, but Mexico.

On June 24, Ganfeng Lithium announced that all the nine major lithium mining concessions held by its subsidiaries in Mexico were cancelled by the General Directorate of Mines of Mexico. The reason given by Mexico's General Directorate of Mines was that Ganfeng's reasons did not meet the minimum investment requirements. But the fact is that the funds invested by Ganfeng Lithium far exceed the minimum investment requirements of the Mexican government. In order to acquire this batch of lithium mining rights, in August 2022, Ganfeng Lithium spent 190 million pounds, equivalent to 1.556 billion yuan, to buy the entire equity of the Sonora lithium project from a British company.

After winning the equity, Ganfeng Lithium invested tens of millions of dollars to build a production line to prepare for the production of lithium carbonate in Mexico. The original plan was to start producing 20,000 tonnes of lithium hydroxide per year in 2024. But now, the production line has just been completed, and I am preparing to do a big job and make a good profit, when the unexpected comes. Mexico has revoked all lithium mining rights of Ganfeng Lithium, which is worse than India's robbery of SAIC MG and vivo India.

India has retained at least 49% of the shares of SAIC MG and Vivo, but Mexico has been nationalized and has not left a dime. Ganfeng Lithium invested more than 1 billion yuan, which was lost overnight. Why is this so? The root cause lies in the fact that Mexico has amended its Mining Code. In May 2023, Mexico passed the "Amendment to the Mining Law", which prohibits all private companies from owning lithium mining concessions, treats lithium mines as a national strategic resource, and implements "lithium mine monopoly", all of which are contracted to a Mexican state-owned enterprise.

It doesn't matter if you invest in foreign countries or local Mexican private capital, it's all banned and all nationalized. Lithium ore is considered "white oil". Why are the oil countries of the Middle East rich? The root cause is that they nationalized the Western oil companies, and all the oil profits were kept in the country. But Western oil companies are not losing money, at least they have been exploiting for more than half a century before they were nationalized. But the China Lithium Mining Company had just gone to sea, and the silver from Baihuahua had just been smashed into it, and it was nationalized before it could be heard.

Moreover, Western oil companies basically started in the colonial era and stole Middle Eastern oil. However, Chinese companies entered Mexico through open and transparent cross-border investments in strict compliance with local laws and regulations. What about Mexico? First open the door for you to come in, then lock the door and take away all the equity and lithium mining rights of the Chinese company. This is even more rogue than the Indian government.

But this is not the behavior of one Mexican family, but throughout Latin America, there has always been a tradition of "the country advances and the people retreat". For example, Mexico, Brazil, Argentina, Colombia, etc., have introduced a large amount of foreign capital, allowing some people to get rich first. However, when the gap between the rich and the poor widened and the people at the bottom became increasingly dissatisfied, they strongly demanded the expulsion of foreign capital, the nationalization of all basic resources such as minerals and oil, and the redistribution of the collected taxes to the common people to win votes. When the foreign capital has run away and the economy is gone, the whole policy will move towards marketization and internationalization again, introduce foreign capital, and then harvest foreign capital.

How did Argentina play bad? That's how it's bad. A large number of state-owned enterprises with rigid systems can neither generate profits nor have international competitiveness, and strictly restrict the entry of foreign capital. In the beginning, Argentines relied on the wealth accumulated by state-owned enterprises to live quite well. But when a generation grows old, Argentina not only has to pay huge pensions, but also has to support a large number of employees in the system who only eat and do not work, and the entire economy is a stagnant water.

Why did Milley engage in "shock therapy"? Because Argentina does not change, everyone knows that there must be no future. Even if it's a gamble, you have to stud. But why does foreign capital still dare not enter Argentina on a large scale? Who knows if Argentina will have another round of expulsion of foreign capital and nationalization after Milley is gone?

Capital is naturally afraid of risk. Forty years ago, when China had just reformed and opened up, foreign capital did not dare to come in. How to win the trust of foreign investors? At the beginning, we mainly relied on attracting overseas Chinese, including Hong Kong, Macao and Taiwan capital, as well as Nanyang Chinese capital. It wasn't until these overseas Chinese made money that Western capital poured in. Can Milley's "shock therapy" be successful? Not in Argentina, but in foreign capital. If foreign capital does not give Argentina a blood transfusion, it will be difficult for Argentina's economy to recover, and it will only cause more people to lose their jobs.

Therefore, Argentina has repeatedly asked China to borrow money, and also wants to bring in Chinese capital. But Western capital does not move, and our money does not dare to act rashly. In addition to Mexico, Chile has also forcibly confiscated a portion of Tianqi Lithium's shares. However, Chile has a better conscience than Mexico, and did not take all of it, but only asked Tianqi Lithium to hand over 85% of the profits to the Chilean government, and the remaining 15% to corporate shareholders.

But this 15% is not all Tianqi Lithium, and two Chilean state-owned enterprises are also major shareholders, namely Chilean Chemical and Mining Group and Chilean National Copper Company. This means that there is not much profit left for Tianqi Lithium.

South America is a resource-rich continent. But South America is also heavily influenced by Che Guevara, and it is an old tradition to confiscate foreign assets at every turn. Lithium mines are known as "white" oil, and it is destined to be an uneven road for Chinese companies to go overseas and control overseas lithium mines.

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