AVZ Minerals secures Chinese backing for DRC lithium project
Australia鈥檚 AVZ Minerals (ASX: AVZ) has secured $240 million in from Chinese private firm Suzhou CATH Energy Technologies (CATH) to develop its Manono lithium-tin project in the Democratic Republic of Congo (DRC).
The deal gives Suzhou CATH, jointly owned by Pei Zhenhua and Chinese battery giant CATL, a 24% holding in the Manono open-pit project, located in southern DRC.
AVZ鈥檚 interest in the project would drop to 51% from 75%, while DRC-owned firm Cominiere (La Congolaise d鈥橢xploitation Mini猫re) would retain its 25% stake.
The total value of the transaction is expected to surpass $400 million with this amount, subject to project development costs verification. The parties have also agreed to assess the feasibility of developing a lithium hydroxide facility.
Private firm Suzhou CATH will pay $240 million for a 24% stake in the project, but total investment is expected to surpass $400 million
AVZ and CATH will now evaluate and progress a study to increase annual production, expanding Dense Media Separation (DMS) capacity from 4.5 million tonnes throughput producing about 700,000 tonnes of spodumene concentrate (SC6), as contemplated by the Definitive Feasibility Study dated April 2020 (DFS), to 10 million tonnes DMS throughput producing 1.6 million tonnes of SC6.
These studies began in early September and are expected to be advanced by December, the companies said.
The Manono lithium-tin project is estimated to be one of the largest lithium-rich LCT (lithium, caesium, tantalum) pegmatite deposits in the world.
The Australian mineral explorer聽already聽has聽an agreement聽with聽another Chinese company:聽Chengxin聽Lithium Group. The firm,聽one of the world鈥檚 top producers of the commodity used in electric vehicle batteries,聽will buy聽lithium ore mineral spodumene from Manono project聽for three years.聽
Shenzhen-based Chengxin is expected to buy an average of 160,000 tonnes to 180,000 tonnes a year, which means AVZ has secured buyers so far for half of the Manono project鈥檚 forecast output.
A recent report by the International Energy Agency (IEA) recommended governments start stockpiling battery metals, noting that lithium demand could increase 40-fold over the next 20 years. IEA executive director Fatih Birol said this would become an 鈥渆nergy security鈥 issue.
China dominates lithium processing, while mine supply largely comes from Chile and Australia.
{{ commodity.name }}
{{ post.title }}
{{ post.date }}
Comments