Australian mineral exploration company, AVZ Minerals has secured $240 million in funding from China’s Suzhou CATH Energy Technologies to develop its Manono lithium and tin project in the Democratic Republic of the Congo (DRC).
The private investment entity, jointly owned by Pei Zhenhua and Contemporary Amperex Technology Co. Ltd. (CATL) will receive a 24% stake in the joint venture under the agreement in exchange for financing the project. Under the agreement, AVZ’s interest would fall from 75% to 51%, while the DRC-owned holding company, Cominière, will retain its 25% stake.
AVZ Minerals indicated that Suzhou CATH is expected to contribute over $400 million in totality, subject to final development costs, with both parties assessing the feasibility of the development of a lithium hydroxide facility. It was also announced that proceeds from the transaction would fund the majority of financing for the project.
As part of the agreement, AVZ Minerals and Suzhou CATH will evaluate the potential expansion of the dense media separation (DMS) production capacity at Manono to increase yearly production from a 4.5 million ton-per-year throughput to 10 million tons per year, producing 1.6 million tons of spodumene concentrate (SC6), up from 0.7 million tons of SC6.
The definitive feasibility study was initiated in early-September, with expectations that it would be significantly progressed by the end of 2021, whereupon the results will be considered by the AVZ Minerals management team and Manono joint venture partners.
“We are delighted to enter into this deal with someone of the caliber of Mr. Pei and CATL, both of whom have the financial capacity, technical expertise, and credibility within the lithium conversation and lithium-ion battery industry to complement the world class Manono Project.” Nigel Ferguson, Managing Director for AVZ Minerals stated, adding, “Our shared strategic vision to develop the vast potential of the Manono Project and further downstream projects, provide an exciting future for AVZ shareholders.”