Australia鈥檚 AVZ聽Minerals聽(ASX: AVZ) has聽secured $240 million in 聽from Chinese private聽firm聽Suzhou CATH Energy Technologies (CATH) to develop its聽Manono lithium-tin project聽in the Democratic Republic of Congo (DRC).聽聽
The deal gives聽Suzhou CATH,聽jointly owned by Pei Zhenhua and聽Chinese battery聽giant聽CATL,聽a 24%聽holding聽in the Manono聽open-pit聽project, located in聽southern DRC.聽
AVZ鈥檚 interest in the project would drop to 51% from 75%, while DRC-owned firm聽Cominiere聽(La Congolaise d鈥橢xploitation聽Mini猫re)聽would retain its 25%聽stake.聽
The total value of the transaction is expected to surpass $400 million with this amount, subject to聽project development costs聽verification. The聽parties聽have聽also agreed聽to assess the feasibility of developing a lithium hydroxide facility.聽
Private firm Suzhou CATH will pay $240 million for a 24% stake in the project, but total investment聽is expected to surpass $400 million聽
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聽be聽advanced聽by聽December, the companies said.
The Manono lithium-tin project is estimated to be one of the largest lithium-rich LCT (lithium,聽caesium, tantalum) pegmatite deposits in the world.聽
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聽Chengxin聽is expected to buy an聽average of聽160,000聽tonnes聽to 180,000聽tonnes聽a year, which means AVZ has secured聽buyers so far聽for half of the Manono project鈥檚 forecast output.聽
础听recent report by the International Energy Agency聽(IEA) recommended governments start stockpiling battery metals, noting that lithium demand could increase 40-fold over the next 20 years.聽IEA executive director Fatih Birol said this would become an 鈥渆nergy security鈥� issue.聽聽
China dominates聽lithium processing, while mine supply largely comes from聽Chile and Australia.聽