World-class Manono Lithium Mine in the DRC to be developed soon, Zijin Mining holds a 15% interest in the project
2022/05/09 15051

Zijin News – Her Excellency Antoinette N'Samba Kalambayi, DRC Minister of Mines, has recently signed the ministerial decree to award the Mining License for the Manono Lithium Mine to Dathcom Mining SA (Dathcom). Zijin Mining holds a 15% interest in the Manono project as a result of a transfer of equity interest made by Congolaise d'Exploitation Minière (COMINIERE).

The Manono Lithium Mine in the DRC is one of the world’s largest lithium-rich LCT (lithium, caesium, tantalum) pegmatite deposits that can be developed through open-pit mining, with a total resource of 401 million tonnes grading 1.63% lithium oxide, or 16.32 million tonnes of lithium carbonate equivalent (LCE), according to an upgraded JORC Code compliant Ore Reserve estimate completed in July 2021.

The Manono Lithium Mine is 100% held by Dathcom, a joint venture established in 2016. Following the signing of several supplementary agreements, in 2017, AVZ International of Australia held a 60% equity interest in Dathcom, COMINIERE 25% and Dathomir Mining Resources SARL (Dathomir) 15%.

The Democratic Republic of Congo is rich in copper, cobalt, and lithium resources. Since 2014, Zijin Mining began to invest in projects in the DRC, including the world-class Kamoa-Kakula Copper Mine, the Kolwezi Copper and Cobalt Mine, and a cement and lime plant, which are all operational now. These projects have made significant contributions to the DRC in terms of tax payments and poverty alleviation for local communities, and are therefore much appreciated by the DRC government and their host communities.

COMINIERE has stepped up cooperation with Zijin Mining, given the group’s outstanding performance in developing and operating projects in the DRC. Following negotiations held between July and September 2021, COMINIERE agreed to transfer a 15% interest in Dathcom to Jincheng Mining, an affiliate of Zijin Mining, and a transfer agreement was signed. The two companies also set up a joint venture, Katamba Mining, to explore and develop two greenfield projects, PE12453 and PE13427, at the periphery of the Manono mine.

An investment representative from Zijin Mining said the acquisition of the 15% interest of Manono had gone through twists and turns. In September 2021, with the approval given by the Ministry of Portfolio (Ministère du Portefeuille) of the DRC, COMINIERE, on the basis of compliance with provisions on pre-emptive rights, signed an Equity Transfer Agreement to sell the 15% interest in the Manono Lithium Mine to Jincheng Mining.

The transaction was obstructed by AVZ. It refused to convene board meetings or shareholders’ meetings and filed two lawsuits, forcing the transaction to go into legal proceedings. In November 2021, the Commercial Court of Lubumbashi rejected the requests of AVZ and chaired a shareholders’ meeting, which approved the transfer of the 15% interest owned by COMINIERE to Jincheng Mining, making Jincheng Mining a legitimate shareholder of Dathcom with a 15% equity interest. Relevant changes were also made in the Trade and Personal Property Credit Register (Registre de Commerce et du Crédit Mobilier, RCCM).

However, AVZ further objected to and obstructed the transaction through various means. In January 2022, the Commercial Court of Lubumbashi again rejected AVZ’s request for revoking relevant shareholder resolutions and changes made in the RCCM.

A senior manager at Zijin Mining involved in the matter said that the participation of Zijin, a responsible mining company with rich, successful experience in operating projects in the DRC, in the Manono project, is certainly conducive to fast-tracking the development of the mine. It is Zijin’s hope that the shareholders of Manono could better communicate and collaborate, put an end to pointless contentions, and fast-track the construction of the project, so that it could make its due contribution to the socio-economic development of the DRC and create more value for its investors.

AVZ described the transfer of equity interest from COMINIERE to Jincheng Mining as “of no force or effect” in a recent announcement. In response, the investment representative from Zijin Mining said that with regard to the transfer, Zijin Mining completed relevant procedures and formalities in strict compliance with Dathcom’s Articles of Association. Faced with obstruction from AVZ, Zijin complied with legal proceedings and settled the matters through litigation. Zijin Mining will actively protect its legitimate rights and interests, and continue to address future issues through litigation and arbitration.

It has been learned that the transfer of a 15% interest in Dathcom between Dathomir and AVZ was terminated by a court of law upon Dathomir’s application, due to significant defects in the original transaction process. Dathomir still holds good legal title to a 15% interest in Dathcom.

COMINIERE said its transfer of the 15% interest in Dathcom to Zijin Mining was appropriate, legitimate, and compliant with relevant rules and regulations. Zijin Mining is a legitimate shareholder possessing a 15% stake in Dathcom. COMINIERE still holds a 10% interest in Dathcom following the completion of its transfer to Zijin Mining. AVZ is yet to complete the legal formalities required for its transfer of a 24% interest in Manono to other parties. If the transfer is completed, the stake held by AVZ in Dathcom will drop to 36%, and AVZ will no longer have an absolute controlling interest in Dathcom.