Australian lithium miner AVZ Minerals and Chinese battery material producer Suzhou CATH Energy Technologies (CATH), partly owned by Contemporary Amperex Technology (CATL), have restructured their joint venture agreement for the Manono Lithium and Tin Project. This project is located in the Democratic Republic of Congo (DRC).

Revised Agreement Details

Under the new agreement, CATH will pay AVZ Minerals $259 million in cash for a 30.5% indirect interest in the Manono project.  Additionally, CATH will provide $20 million to finance AVZ’s working capital and general expenditures. This infusion of capital will likely be crucial for AVZ as it navigates ongoing challenges related to the project.

Offtake Agreement and Future Collaboration

CATH has secured a revised offtake deal, granting them the option to purchase up to 100% of Manono’s spodumene concentrate, contingent on fulfilling certain conditions. This provides CATH with a significant potential source of lithium feedstock.  Furthermore, AVZ will have the option to acquire up to 49% of CATH’s interest in a lithium hydroxide or carbonate conversion plant that CATH plans to construct. This potential future collaboration on downstream processing could be a significant development for both companies.

Background and Ongoing Dispute

The Manono project has been embroiled in a dispute between AVZ and Chinese miner Zijin Mining over a previously unrecognized transaction involving the DRC’s state-owned mining firm Cominiere.  This complex situation adds another layer of complexity to the project’s development.  Adding to the challenges, AVZ recently acknowledged an investigation involving bribery and corruption accusations related to the Manono project. The Australian Federal Police executed search warrants. AVZ has denied any wrongdoing. These legal and ownership disputes highlight the risks associated with mining projects in the DRC. They also underscore the importance of due diligence and transparent business practices.