May 24, 2022
Chinese, Australian Investors Battle for Largest Lithium Deposit
Australia’s AVZ Minerals Ltd. is battling to retain control of what is potentially the world’s largest untapped lithium deposit amid ownership claims from Chinese investors, according to Boatman Capital.
AVZ’s interest in the Manono lithium project in the Democratic Republic of Congo could fall to 36% from 75%, London-based short-seller Boatman said in a research report on Friday.
That may follow its planned sale of a 24% stake this month and a flurry of lawsuits from companies, including Zijin Mining Group Co., claiming ownership, documents published by Boatman show.
“At best, AVZ faces months or years of legal fights” to block a claim by a Zijin subsidiary, Boatman said in the report. “At worst, AVZ will lose control of Manono.”
AVZ said Friday it extended the voluntary suspension of the trading of its stock on the ASX until June 1, having halted selling and buying of its shares May 9 as it waits for the Congolese government to complete its permit approvals for Manono.
AVZ, with a market capitalization of about A$2.75 billion ($1.9 billion), had soared more than 400% over 12 months.
Congo is an important source of materials needed in the transition to clean energy.
It’s the world’s largest producer of cobalt and holds vast deposits of lithium, both key ingredients in electric-vehicle batteries.
Chinese companies have moved aggressively to secure supplies from the central African country, and now control about half of Congo’s cobalt output and approximately 70% of its copper production.
In China, the world’s biggest EV market, lithium prices have climbed more than 400% in the past year, stabilizing in recent months as stringent Covid restrictions weigh on manufacturing.
