The author is not an insider or shareholder of any of the companies mentioned above.AVZ Minerals Limited (ASX: AVZ, OTC: AZZVF) ('AVZ' or 'Company') refers to its request for an extension of its voluntary suspension dated 31 January 2023 and its announcement dated 6 February 2023 of the issue of two new Ministerial Decrees in relation to the Manono Lithium and Tin Project ( Manono Project).
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Seek a licensed professional for investment advice. It is not intended to be investment advice. The above references an opinion and is for information purposes only. The battle for the Manono project is just one example of the challenges some Chinese companies are facing with challenges to stakes in projects in Africa and South America. These accusations have led to increased scrutiny from host countries and government officials. However, these companies have often been accused of unfair business practices, such as acquiring assets through convoluted ownership structures and paying below-market prices for resources. In a previous agreement, Chinese battery maker Suzhou CATH Energy Technologies agreed to buy 24% of the project from AVZ for $240 million, representing almost five times the value per share versus the Cominiere and Jin Cheng deal.Ĭhina’s mining companies have increasingly looked outside its borders to invest in metals and minerals needed to fuel its manufacturing sector. Part of the lawsuit will hinge on the price of the deal. Cominiere holds 25% of the project, but now AVZ is discussing acquiring the 15% stake from Cominiere. However, AVZ’s claim is that the agreement is moot because the company holds the right to preempt share sales of the project by Cominiere. Boatman Capital has published a report in which a contract showing Jin Cheng did agree to pay $33.4 million to Cominiere for the 15% stake was signed. The claim must now be heard by the Chamber, and will likely be followed by litigation and further lawsuits. The company says it will claim a 15% share of the project previously acquired from Congo’s state-owned mining company Cominiere in 2021. However, shortly after announcing that, the company announced that Jin Cheng Mining Company Ltd., a subsidiary of Zijin, requested arbitrations at the International Chamber of Commerce in Paris. Now, AVZ is just days away from securing a mining permit for the project according to the company. Chinese companies are estimated to control approximately 50% of the country’s cobalt output and over 70% of copper production. The country also has some of the biggest lithium deposits, making Congo a battery metals hotspot for mining companies around the world. Congo has been a flashpoint for many projects, with the central African country being the largest producer of cobalt in the world.
Chinese companies have been on a spending spree in recent years, acquiring mining assets around the world. The Manono project is just one of many battles being fought over Africa’s vast mineral resources. The price of lithium has multiple by 400% in the past twelve months, with prices only recently stabilizing during restrictions in China that have hampered manufacturing. Lithium is an important material for electric-vehicle batteries. With a market capitalization of about A$2.75 billion ($1.9 billion), AVZ had risen by more than 400% in the previous year. claim ownership.Īccording to Friday’s statement from AVZ, the company has extended its voluntary suspension of trading on the ASX until June 1, waiting for the Congolese government to complete permit approvals for Manono.
The company is planning a sale of 24% of the project in May, while other companies including Zijin Mining Group Co. The Manono project is located in the Democratic Republic of Congo. Chinese investors have claimed ownership of the project, which would drop AVZ’s share of the project to 36% from its current 75% stake. (ASX:AVZ) is currently trying to maintain control of the Manono Lithium Project, possibly the largest untapped lithium deposit in the world.
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