The future of lithium explorer AVZ Minerals’ ill-fated lithium project in the Democratic Republic of Congo (DRC) could hinge on crucial talks with United States special envoy Massad Bouls. He is due to arrive in Kinshasa on Monday.
The Perth-based miner is hopeful that the U.S. - during its dealmaking with the DRC over a potential critical minerals pact - will also support its claim over the disputed Manono lithium project - the world’s largest hard rock lithium deposit in Africa.
AVZ blamed its delisting last year on the DRC government’s failure to comply with court orders. It also has multiple legal battles with Chinese and Congolese mining rivals over control of the Manono tenement in the resource-rich country’s southwest.
The one-time ASX200 stock, with a market cap exceeding $4 billion, became a market darling after convincing investors of plans to secure a licence to mine the Manono deposit. This was estimated to be more than twice the size of Australia’s richest lithium mine, Greenbushes.
The stock subsequently entered a trading halt in May 2022 after disclosing to investors that it faced a legal dispute with Chinese and Congolese rivals over ownership rights to the Manono deposit.
Assuming the pending discussions are fruitful, AVZ could finally on-sell the Manono interest to California-based KoBold Metals for up to US$1.5 billion (2.38 billion) plus a royalty.
A deal between AVZ and KoBold on the southern portion of the Manono deposit is likely to fall through if the U.S. fails to represent the miner’s legal claim to the world-renowned lithium deposit.
It’s understood that Kobold also wants to see AVZ compensated appropriately for Manono.
AVZ continues to maintain its rights to all Manono despite the DRC splitting the licence. This allows China-based mining giant Zijin to develop the northern half.
Manono has an 842 million tonnes resource at 1.62% lithium oxide and is divided into two geographically separate southern and northern deposits.
The U.S. has previously flagged its willingness to support AVZ's claim to the southern licence to avoid antagonising China’s claim to the northern half.
It’s understood that Rio Tinto (ASX: RIO) has expressed interest in joining forces with KoBold on Manono development.
