Chinese miner Zijin locks horns with Australia’s AVZ over Congo’s Manono Lithium Mine in dispute about 15 per cent stake that could decide who controls project
- Zijin says it is the legitimate owner of a 15 per cent stake in Congo’s Manono Lithium Mine, denies AVZ claim that transfer was ‘spurious in nature’
- 15 per cent stake could result in the project falling under Chinese or Australian control
Zijin Mining, one of China’s largest gold and copper miners, is entangled in a legal dispute with Australian miner AVZ Minerals over the purchase of a stake in one of the most important lithium projects in the world.
Zijin, which is based in China’s Fujian province and is listed in Hong Kong, said in a statement on its website on Monday that it is the legitimate owner of a 15 per cent stake in Congo’s Manono Lithium Mine.
“Zijin Mining will actively protect its legitimate rights and interests, and continue to address future issues through litigation and arbitration,” the miner said, adding that it had started legal proceedings to counter the Australian firm, which was denying its stakeholder status.
Zijin and AVZ’s competing claims are significant because the 15 per cent stake could result in the project falling under Chinese or Australian control, at a time when competition is rising among international mining giants because of the demand for materials such as lithium, which is used in the production of lithium-ion batteries for electric vehicles. It is now a matter for courts in Congo to decide.
Manono is “one of the most important new mining projects in the world that will significantly contribute to the global green energy transition”, AVZ said. The mine contains 16.3 million tonnes of lithium carbonate equivalent, Zijin said, citing an estimate completed in July 2021.
According to the Chinese miner, Congolaise d’Exploitation Minière (Cominiere) has transferred its 15 per cent shareholding in Dathcom Mining SA, a joint venture that owns 100 per cent of Manono, to Zijin.
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AVZ, which is based in Perth and listed on the Australian Securities Exchange in Sydney, however, said in a statement on May 4 that the transfer was “spurious in nature”, without merit, contained fundamental and material errors, and had no substance or foundation in fact or law.
“Any purported transfer of the 15 per cent interest to a third party would be a material breach of the pre-emptive rights contained in the existing shareholders agreement owed to AVZ, invalid and of no force or effect,” AVZ said.
AVZ said that it was progressing the sale of a 24 per cent indirect stake in the project to CATH, or Suzhou CATH Energy Technologies, a joint venture between Shenzhen-listed Contemporary Amperex Technology and Shenzhen-listed Suzhou TA&A Ultra Clean Technology. If Zijin’s claim is successful, it is likely to team up with CATH to control 39 per cent of the mine, analysts led by Dennis Ip at Daiwa Capital Markets said in a report on Monday.
This holding will exceed the 36 per cent stake owned by AVZ, after its current 60 per cent interest is diluted by the sale of the 24 per cent stake it had agreed to sell to CATH, according to the Zijin statement.
AVZ, however, said that it owned a 75 per cent stake in the mine, and that it would ultimately own an indirect interest worth 51 per cent of the project after the sale of the 24 per cent to CATH.
Prices for Chinese lithium carbonate and lithium hydroxide, the main compounds used to make lithium-ion batteries, have jumped around fourfold since last September, although lithium-salt prices have started a mild retreat since early April.
