The Australian Securities and Investments Commission (ASIC) said on Tuesday, Nov. 11, that it had initiated Federal Court proceedings against AVZ Minerals, the mining company that claimed mining rights over the Manono lithium deposit in the Democratic Republic of Congo (DRC).

The regulator alleges that the company and two of its directors failed to meet their disclosure obligations to investors concerning the legal dispute surrounding the project. AVZ was listed on the Australian Securities Exchange (ASX) until trading was suspended in May 2022. It was delisted in May 2024.

Through its subsidiary Dathcom Mining, AVZ held a 75 percent stake in a licence covering part of the Manono site, which is widely regarded as the DRC’s largest lithium deposit, but it never secured the mining rights. In October 2023, joint-venture partner Cominière, a state-owned company, announced that it had signed an agreement to operate part of the deposit with China’s Zijin Mining Group. AVZ is contesting these developments and has launched several international legal proceedings to defend its claims.

ASIC alleges that the company failed to disclose information about the dispute for nearly a year. Managing Director Nigel Ferguson and Technical Director Graeme Johnston are also accused of breaching their duties as directors by allowing the publication of “false or misleading” announcements to the ASX.

“It was all but impossible for retail investors to travel to an overseas location in central Africa where the company’s operations were being conducted. In those circumstances, investors rely on the company to provide accurate and timely information. We allege Mr Ferguson and Mr Johnston failed to inform investors of the ongoing issues in this case for nearly 12 months,” ASIC Deputy Chair Sarah Court said.

AVZ and its directors “strongly denied all allegations of wrongdoing” in a statement issued shortly afterward, saying they will vigorously defend themselves in court.

Emiliano Tossou