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Manono Lithium: Chinese CATH Takes AVZ’s Side in Dispute with DR Congo State

Manono Lithium: Chinese CATH Takes AVZ’s Side in Dispute with DR Congo State

In the ongoing battle to take control of the Manono lithium project, Australian mining company AVZ has secured the support of China's Suzhou CATH Energy Technologies (CATH). On January 8, 2025, AVZ announced that it had obtained a $20 million facility from CATH to finance its working capital requirements and operations over the next 12 months, including efforts related to the project dispute with the Democratic Republic of Congo (DRC) government.

The new agreement has allowed AVZ to waive the $15 million it previously secured from Locke Capital, a litigation financing specialist. AVZ has used the money to support its legal actions surrounding the Manono project. 

The new facility is part of a revised partnership between AVZ and CATH, established in 2021 for developing Manono. By maintaining its partnership with AVZ, CATH aims to secure a portion of Manono's lithium production. The revised agreement allows CATH to purchase up to 100% of uncommitted production volumes until a five-year period expires or any funds advanced for project development costs are repaid. Afterward, CATH's purchase rights will be reduced to its economic interest in the joint venture. Additionally, subject to obtaining mining rights for Manono, CATH can acquire a 30.5% indirect interest in the project by paying AVZ $259.25 million.

This new deal bolsters the AVZ-CATH partnership. In parallel, Zijin Mining plans to bring the lithium deposit into production by 2026, according to Bloomberg which relayed a 7 November 2024 mail from Zijin. The Chinese firm plans this despite complaints surrounding the mining permit granted by the DRC.

In its January 8 release, AVZ did not specify when it hopes to regain control of the Manono project or comment on Zijin's production plans. Over the past few years, the Australian firm has initiated various legal proceedings to contest its eviction from the project, but the outcome remains uncertain.

Nevertheless, AVZ and Zijin’s interest in Manono highlights the project’s potential to make the DRC one of Africa’s top lithium producers. According to previous estimates by AVZ, the Manono deposit contains at least 400 million tonnes of mineral resources grading 1.65% lithium. 

This article was initially published in French by Emiliano Tossou

 

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