AVZ Minerals has locked in a $US400 million ($550.8 million) investment from Suzhou CATH Energy Technologies to put the Manono lithium and tin project in the Democratic Republic of Congo into production.
Suzhou will pay $US240 million to earn a 24 per cent interest in Manono, which is a joint venture between AVZ and La Congolaise d’Exploitation Minière.
AVZ will control a 51 per cent interest and remain the lead developer of Manono after its agreement with Suzhou is finalised.
According to AVZ, a further amount will fund Suzhou’s pro rata portion of funding for Manono’s development, with the transaction contributing over $US400 million.
Suzhou is a private investment company that is owned by Pei Zhenhua and Contemporary Amperex Technology.
“This is a very significant day for the company and all of our stakeholders as we move closer to making the Manono project a leading global producer of lithium products,” AVZ managing director Nigel Ferguson said.
“We are delighted to enter into this deal with someone of the calibre of Mr Pei and CATL both of whom have the financial capacity, technical expertise and credibility within the lithium conversion and lithium-ion battery industry to compliment the world-class Manono project.
“Our shared strategic vision to develop the vast potential of the Manono project and further downstream projects, provide an exciting future for AVZ shareholders.
“Forging of this partnership compliments AVZ’s excellent collaborative relationship with the Government of the Democratic Republic of Congo and the local communities in which we operate.”
AVZ and Suzhou are also conducting a study to increase annual production from 4.5 million tonnes per annum to 10 million tonnes per annum.
Under the agreement, AVZ will move its existing offtake agreement with Yibin Tianyi to Suzhou.
“We look forward to updating our shareholders in the near future with respect to award of the mining licence and execution of the collaboration development agreement, which are progressing extremely well through government channels,” Ferguson said.
“Once this transaction and the associated agreements are finalised, 100 per cent of our saleable lithium products will be accounted for and a significant portion of the Manono project will be financed via the equity contributions provided by this transaction.