Australia-based AVZ Minerals Limited has secured a strategic, long-term offtake partner agreement with Yibin Tianyi Lithium Industry Co., Ltd. for the supply of spodumene concentrate (SC6) from the Manono Lithium and Tin Project in the Democratic Republic of Congo (DRC). Spodumene—a lithium mineral derived from pegmatite rock—is known for its high lithium content.

Yibin Tianyi is a leading global battery materials producer that is continuing to expand its lithium hydroxide production capacity as a key participant in the supply chain of Contemporary Amperex Technology (CATL), the world’s largest lithium-ion battery maker.

Yibin Tianyi is set to become one of the largest lithium hydroxide producers in China, with initial production capacity of up to 20,000t of lithium hydroxide per annum and with future staged expansions expected to increase production to approximately 100,000t per annum. Yibin Tianyi will require approximately 700,000mt per year of SC6 to satisfy its internal demand after commissioning its planned hydroxide plant expansions.

Under the offtake agreement, Yibin Tianyi will purchase up to 200,000t per annum of SC6 for an initial 3-year term following commencement of production with an option to extend for an additional two years.

The Manono Project is owned by AVZ (60%), La Congolaise d’Exploitation Minière SA (30%) (Cominiere, a State-owned enterprise) and Dathomir Mining Resources SARL (10%) (Dathomir, a privately owned company). AVZ is responsible for funding expenditure to completion of a feasibility study and a decision to mine.

We are very pleased to conclude our discussions with Yibin Tianyi and to sign another binding offtake agreement for SC6 to a Chinese converter. This agreement takes our SC6 binding offtake commitments to more than 80% of the Project’s annual SC6 production [700kt, with 153kt SC6 production being used for Primary Lithium Sulphate conversion] which is a massive endorsement for the Manono Project and one that satisfies an important condition precedent for our prospective project financiers.

At present, we are seeing buoyant market conditions with reported SC6 prices in China increasing circa 30% in the first quarter of the year while during the same time the LME cash tin price has surged circa 30% boding well for the Manono Project’s Optimized Definitive Feasibility Study which is due for completion next quarter.

Positive market sentiment is greatly assisting our negotiations and while we are not compelled to commit to further forward sales, we are continuing to explore strategic opportunities for our offtakes in both traditional and emerging lithium markets including Europe, US and India.

—Nigel Ferguson, AVZ Managing Director

The Manono Project is one of the world’s largest lithium-rich LCT (lithium, caesium, tantalum) pegmatite deposits. The Manono pegmatites extend for a strike length of at least 13km and are more than 240m thick in places. The Project covers the historic Manono Mine, a pegmatite deposit mined for its tin content from 1919 to 1982. AVZ also holds a 100% interest in the Manono Extension Project which surrounds the Manono Project.

Two large areas of pegmatite have been identified, with the northeast area, referred to as the Manono sector and the southwest area, referred to as the Kitotolo sector. Mapping within the two sectors has established that there are many pegmatites, representing separate intrusions, including six large pegmatites.

The large pegmatites all contain spodumene mineralization. The majority of the smaller pegmatites also contain spodumene and in some cases other lithium minerals. The two largest pegmatites (known as the Carriere de l’Este Pegmatite and the Roche Dure Pegmatite) are each of similar size or larger than the famous Greenbushes Pegmatite in Western Australia.

Based on detailed prospect scale mapping, trenching and drill results, and given the size and mineralized nature of the pegmatites at Manono, AVZ generated an exploration target of between 1Bt to 1.2Bt of 1.25% to 1.5% Li₂O for the entire Manono Project, including between 300 and 400Mt of 1.25% to 1.5% Li₂O for the Roche Dure Pegmatite alone. The potential quantity and grade of the exploration target as stated, is conceptual in nature as there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

The Project will include an open-pit mining operation at the Roche Dure pegmatite deposit, producing lithium, tin and tantalum. The Project will also consist of construction of spodumene concentrate (SC6) and primary lithium sulphate (PLS) processing facilities. It is expected that 700,000 t/year of SC6 and 46,000 t/year of PLS will be produced annually with 153,000 t/year of the SC6 product used as feedstock in the PLS production. Once processed, products will be transported using company-owned vehicles to Kabondo Dianda where it will be loaded onto trains for transport to the port.