Chinese giant joins Australian miner’s lithium project

Australian company AVZ Minerals is involved in a legal battle with one of China’s largest miners, Zijin Mining, over potential ownership of one of the world’s largest lithium deposits in the Democratic Republic of the Congo. increase.

This is not the first challenge that Australian miners faced from the conflict of interests in China in Africa, but reveals how aggressive the Chinese Communist Party was in the battle for precious minerals.

On May 11, Perth-based AVZ Minerals announced that it would suspend trading on the Australian Stock Exchange after being asked for arbitration by Zijin Mining at the International Chamber of Commerce in Paris.

The dispute is focused on the competing claims of the joint venture Dathcom behind the large Manonolithium and Tin project in the southern Democratic Republic of the Congo. The project is estimated to contain 16.3 million tonnes of lithium carbonate, the main component of electricity. Vehicle battery.

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Nigel Ferguson, General Director of AVZ Minerals in Australia, is looking at a lithium mine in Manono, Democratic Republic of the Congo. The country is rich in lithium, an essential mineral for electric vehicle batteries, nesting on February 17, 2022, in the ruins of an old mining town in Manono, southeast of Tanganyika. .. (Junior Kannah / AFP via Getty Images)

AVZ of Australia states that it owns more than 75% of Dathcom and the remaining 25% is owned by Congolese state-owned Cominiere. The company has transferred 10 percent of this stake to the government, with AVZ remaining 15 percent.

At the same time, AVZ is in the process of selling a 24% stake in Suzhou CATH Energy Technology of China to fund the development of the project. As a result, AVZ will own 51% of Dathcom (except 15% under negotiation).

However, on May 9, China’s Zijin announced an announcement claiming to hold a 15% stake in Dathcom.pdf) May 4th.

Zijin claimed to have negotiated a deal with Congolese Kominea between July and September 2021.pdf).

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On October 8, 2019, President Felix Tisekedi of the Democratic Republic of the Congo (DRC) opened the Agricultural Business Research Center at the International Institute of Tropical Agriculture (IITA) in Bukavu, Democratic Republic of the Congo. (TchandrouNitanga / AFP via Getty image)

The transaction was subsequently claimed to have been “interfered” by AVZ, which refused to convene a shareholders’ meeting and filed two proceedings to force the matter into court.

In November 2021, the Congolese Commercial Court in Lubumbashi approved the sale of 15% to Zijin’s affiliates and rejected further attempts by AVZ in the proceedings.

If Zijin’s claim is upheld, Australia’s AVZ precursors will worsen and effectively lose control of the mine.

A Chinese mining company claimed that AVZ did not hold a 75% stake in the joint venture, but instead held only a 60% stake.

Still, Zijin supports the deal that AVZ will sell its 24% stake to Suzhou CATH Energy Technologies in China. Due to the combined effect of both CATH and Zijin’s claims, AVZ ownership will drop to only 36%, leaving both Chinese companies with a 39% stake in Dathcom. This is a larger controlling interest in the lithium mine.

CATH is a subsidiary of Contemporary Amperex Technology in China, the world’s largest battery maker and major automaker Tesla and BMW’s leading supplier.

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Tesla’s three Chinese model vehicles will be seen at a delivery event at the Shanghai factory on January 7, 2020. (AlySong / Reuters)

The turbidity of trading in Africa highlights an ongoing trend on the continent of Western companies that are losing control over mining projects from competing Chinese interests.

In December 2020, two Australian miners and a British company began dispute resolution with the Republic of the Congo after depriving them of their mining licenses. Continent.

The three mining companies were developing major iron ore deposits in the country.

Meanwhile, Australia’s Foreign Investment Review Board is considering a move by China’s Shenghe Resources to buy a 20% stake in peak rare earths. Its core asset is the Ngualla rare earth project in Tanzania. -End magnets used for wind turbines and flares.

Rare Earth and important minerals are essential for household appliances, green technology, medical devices and even fighters.

Competition for minerals is intensifying as democracies and Beijing vie for control of their precious resource supply chain. This is exacerbated by the Western movement to strengthen climate change measures and requires green technology components.

China is believed to control about 90% of the world’s production of important rare earth minerals, and democracies are beginning to develop new supply chains independent of Beijing.

Daniel Y. Ten


Daniel Y. Teng is based in Sydney. He focuses on national politics, including federal politics, COVID-19 response, and relations between Australia and China. Do you have a hint? Contact him at [email protected]