The mining company received a mining permit from the previous administration to operate in the border state of Sonora, he said in his daily morning press conference.

But the current government would like the company to give up the right to mine lithium because the government is planning to give the area an exclusive concession to a new state firm, the president told Reuters.

While the private company may have a mining permit, it lacks all the others necessary to operate, including for the use of water or to address the environmental impact of the activities, he said.

Obrador did not name the company, but according to official filings, the only company that issued a permit during the previous administration is a subsidiary of the Chinese company Guanfeng Lithium.

Gangfeng did not respond to requests for comment.

“We are looking for a negotiated solution in order for us to avoid a legal process,” the president said, explaining that the company’s activities to explore are reduced to a very small area.

The concession to the new company, LitioMx, will be granted during a presidential visit to the region in mid-February, Obrador said.

Sonora Plan

The plan to set up a lithium industry in Sonora is part of a larger effort to bring development to the region that would allow it to link up to the southern states of the United States such as California and Arizona, Obrador said.

The plan, called the “Sonora Plan,” hopes the state can, in the long run, produce lithium batteries for the auto industry, and is expected to draw a total investment of nearly $50 billion in the years to come.

The Sonora Plan, the president said, also takes into account the need for transmitters of clean energy in the region to serve the auto industry, and the 1GW solar plant that is built in Puerto Peñasco is part of this.

The plan also includes four other solar plants of a similar scale as well as new highways and transmission lines, he said.