AVZ poised for Manono Special Economic Zone approval

AVZ Minerals hopes to have a key precursor to the planned development of its Manono hard-rock lithium and tin mining and processing operation in the Democratic Republic of the Congo ratified by the end of May. The new DRC Government will shortly consider applying a proposed tax and fiscal incentive arrangement called the Manono Special Economic Zone, or “MSEZ” to the project following AVZ’s presentation to a government delegation last month.

The Perth-based company says it has been updating its Manono Special Economic Zone technical, development, environmental and financial documentation with additional information as requested by the in-coming DRC Government.

AVZ intends lodging the application shortly and expects a decision on the granting of the MSEZ by the end of this month.

The documents relate to the development of infrastructure and resources culminating in the Manono mine which is contemplated to be the anchor tenant for the MSEZ.

The proposed special economic zone that will enjoy a range of government-related economic benefits is designed to encourage foreign direct investment via a favourable fiscal regime.

A new DRC Government cabinet was appointed earlier this month by Prime Minister Jean-Michel Sama Lukonde and AVZ says it has been working with the new cabinet to progress the development of the Manono project within the framework of the proposed Manono Special Economic Zone.

New ministers that the company is in the process of engaging with include the Minister of Mines, Antoinette N’Samba Kalambayi, the Minister of State, Adele Kayinda, the Deputy Prime Minister in charge of Environmental and Sustainable Development, Eve Bazaiba and the Minister for Hydraulic Resources and Electricity, Mwenze Mukaleng Olivier.

Prior to the Manono Special Economic Zone decision, AVZ has been delivering on other key milestones including recently nailing down more than 80 per cent of forecast annual spodumene concentrate production at Manono under a trio of binding offtake agreements.

AVZ Minerals Managing Director, Nigel Ferguson said: “The finalisation of the three binding offtake agreements also satisfies a critical condition precedent for the Manono project’s prospective financiers.”

“Both market and geopolitical factors have fuelled a steep increase in the SC6 price since the start of 2021, with reported prices in China up 56 per cent. With expectations that structural supply deficits will remain and as the uptake of EV’s continues to increase around the globe, the current upward price trends for both spodumene concentrate and lithium chemical products are expected to continue.”

A final investment decision on the project development has been slated for around mid-2021 and the awarding of a 20-year renewable contract to manage and operate the Mpiana Mwanga hydro-electric power plant is also anticipated in the coming months.

The company has also reached 70 per cent completion of its Manono front end engineering design study, while a revised mineral resource estimate and updated pit shell design for the massive Roche Dure deposit and the upgrading of the definitive feasibility study to a bankable feasibility study level are all in the wings.

Roche Dure, one of the world’s largest open-pittable, lithium-rich pegmatite resources, hosts proved and probable ore reserves of 93 million tonnes of ore grading an average 1.58 per cent lithium oxide.

On a wholly owned basis, the definitive feasibility study Mark I shows Manono churning out a cracking EBITDA figure averaging more than US$400 million a year.

AVZ currently owns 60 per cent of Manono and has an option to increase its stake to 75 per cent.

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