Bacanora secures environmental permit for Sonora project in Mexico

Shares in lithium exploration and development company Bacanora Minerals (TSX-V, LON:BCN) got a boost Friday after it announced it had received environmental approval from the Mexican government for its Sonora project.

The permit lets Bacanora go-ahead with its 35,000tpa (tons per annum) lithium carbonate operation, following comprehensive studies carried out over two years.

“Government approval for the environmental impact statement is the latest key requirement that is now in place at Sonora,” chief executive Peter Secker said in the statement.

The permit lets Bacanora go-ahead with its 35,000 tonnes per annum lithium carbonate operation in Mexico.

“One-by-one we are ticking off our checklist ahead of our goal of developing Sonora into a world class lithium operation,” he noted.

Share in the company climbed on the news in London, closing Friday 3.23% higher at 84.14p. Year-to-date the stock in up more than 20%.

The permit acquisition is one of Bacanora’s latest milestone in the past two years. In 2015, the firm and its joint-venture partner Rare Earth Minerals (LON:REM) signed a conditional agreement with Tesla Motors (NASDAQ: TSLA) to supply the electric cars and energy storage products company with lithium hydroxide from the Sonora project.

In May 2017, the company secured a $11 million investment from Blackrock. And earlier this year, it inked a long-term supply deal with Japan’s Hanwa Corporation, which will see the Tokyo-based trader acquire up to 100% of the output coming from Sonora.

Frequently referred to as "white petroleum," lithium drives much of the modern world, as it has become an irreplaceable component of rechargeable batteries used in high tech devices and electric cars.

The lithium market, while still relatively small — worth about $1bn a year — is expected to triple in size by 2025, according to analysts at Goldman Sachs.

The commodity has attracted increasing interest from investors, not only in Latin America, where the world’s largest deposits are located, but also in other places such as the UK.