Long renowned for its wealth of copper and cobalt, the Democratic Republic of Congo (DRC) has also been revealed as a significant source of lithium, the metal used to make rechargeable batteries in phones and electric vehicles (EVs).
The country’s as-yet untapped lithium reserves are believed to rival Australia, China and Argentina, attracting Canadian explorers including Tantalex Lithium Resources (CSE:TTX, OTC:TTLXF), AJN Resources Inc (CSE:AJN), as well as Australia’s AVZ Minerals.
AJN Resources, headed by Klaus Eckoff who spearheaded AVZ Mineral’s acquisition of the world-class Manono lithium project in 2017, has staked out some of the potentially most lucrative lithium deposits in the Eastern DRC.
Apart from the Kabunda license, where AJN hopes to start drilling by the end of October 2023, the company recently acquired two more licenses on the Manono trend where AVZ Minerals defined 401 million tonnes grading 1.65% Li2O (lithium dioxide) at its Roche Dure prospect.
The company is organizing drilling permits for the new license areas to carry out shallow RC drilling to identify the occurrence of pegmatites within the project areas.
Chinese investors
There’s a huge appetite for new projects in the DRC and AJN’s chief financial officer Mark Gasson recently told Proactive that exploration success with its projects is likely to attract attention, particularly from Chinese investors and lithium producers in the region who are trying to buy up as much prospective ground as possible.
China’s interest in Africa and the DRC is nothing new, according to Mining Capital’s Alastair Ford.
“Zimbabwe has been the recent lithium hotspot for China. To date, DRC has been mainly about copper, and to some extent cobalt and diamonds,” Ford said in an emailed comment.
“The Chinese have a commanding position in Tenke Fungurume, one of the world’s largest copper mines.”
In terms of the number of EVs produced and on the streets, Ford noted that China is far ahead of the West, hence the hunger for lithium.
And while the United States is going out of its way with incentives and grants aimed at developing North American sources of lithium through legislation including the Inflation Reduction Act, Ford said US minerals policy remains ad hoc, leaving the door open to foreign supplies.
Offtake agreement
While Chinese buyers may be on the lookout for exploration success, Tantalex Lithium has already found a suitor in Glencore International.
The company announced a marketing offtake agreement for lithium produced from its Manono liithium tailings project with the global mining and commodities trading giant in September.
Apart from a $5 million floating finance facility, Glencore will also finance up to a third of the capital requirements for the tailings project.
“This will be the first investment on Glencore’s side in the DRC on lithium. They will bring their experience in the country,” said Hadley Natus, chair of Tantalex, told the Financial Times.
“With battery metals, I don’t see how people can turn a blind eye to the DRC.”
Obstacles in the way
While the DRC may be a lucrative source of battery metals, the progression of mining projects is not always smooth.
AVZ Minerals has continued to report strong drilling results from its Roche Dure prospect at Manono but faces an ownership tussle, In June the company lodged an arbitration request at the International Centre for Settlement of Investment Disputes in Washington, accusing the DRC of wrongly refusing to issue a permit needed to develop the project.
AVZ claims legal ownership of 75% of Manono, although 30% of that interest is disputed. Its mining licence linked to the project was cancelled by the DRC government on January 28.
"The company considers the conduct of the DRC to be unlawful and the company, together with the claimants, will take all actions necessary to protect the interests of its stakeholders," AVZ said in a statement.
The company's ASX-listed securities remained in suspension pending a resolution and clarity on the mining and exploration rights for the Manono project.
Contact the author at stephen.gunnion@proactiveinvestors.com