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| Manono Lithium |
CATH Secures Stake and Offtake Rights Amid Disputes
Australian lithium miner AVZ Minerals and Chinese battery materials producer Suzhou CATH Energy Technologies (CATH), partially owned by Contemporary Amperex Technology (CATL), have restructured their joint venture for the Manono Lithium and Tin Project in the Democratic Republic of Congo (DRC). This agreement comes amid ongoing disputes concerning ownership and regulatory challenges.
Financial Terms and Offtake Agreement
Under the revised terms, CATH will pay AVZ Minerals $259 million in cash for a 30.5% indirect stake in the Manono project. Additionally, CATH will provide $20 million to fund AVZ’s working capital and general expenditures.
CATH has also secured an offtake agreement, allowing it to purchase up to 100% of Manono’s spodumene concentrate, contingent upon meeting specific conditions. In return, AVZ has the option to acquire up to 49% of CATH’s stake in a planned lithium hydroxide or carbonate processing plant, positioning both companies for future downstream integration.
Ongoing Disputes and Legal Challenges
The Manono project remains entangled in a dispute between AVZ Minerals and Zijin Mining regarding a previously unrecognized transaction involving the DRC’s state-owned mining company, Cominiere. Adding to the uncertainty, AVZ recently confirmed an Australian Federal Police investigation into allegations of bribery and corruption related to the project, though the company denies any wrongdoing.
These disputes underscore the complexities of operating in the DRC, where regulatory uncertainties and legal battles can impact mining investments. The restructuring of the joint venture signals both AVZ’s and CATH’s commitment to securing lithium supply despite ongoing legal and ownership challenges.
