Kodal Minerals PLC (AIM:KOD) CEO, Bernard Aylward, talked with Proactive about the company’s latest operational progress at the Bougouni Lithium Project in Mali, ongoing shipments to China, and the newly announced arbitration process relating to a $15 million payment connected to a 2024 agreement with the Mali government.
Aylward explained that Kodal Minerals PLC has entered arbitration following discussions with joint venture partner Hainan Mining Co. Ltd regarding an indemnity claim under the existing financing agreement. He stated that the parties hold “diametrically opposed views” and said the company is comfortable allowing a third party to reach a decision while discussions continue during the arbitration process.
Despite the dispute, Aylward emphasised that the underlying partnership remains strong, with both parties committed to advancing Bougouni, including planning for stage two development and a significant 2026 work programme involving drilling and engineering studies.
Operationally, Bougouni is performing well. The company recently completed its second shipment, receiving an initial 95% payment of just under US$24 million for nearly 20,000 tonnes of spodumene concentrate. A third shipment is anticipated in late March or early April. Aylward stressed, “we’re selling into a very high price, lithium market, and our product is in strong demand,” noting that Hainan Mining is keen to secure as much product as possible.
He added that mining, processing, and logistics are progressing smoothly, with product being transported to port, shipped to China, and generating revenue.
Proactive: Bernard, very good to speak with you. You've announced you've entered arbitration over the $15 million payment to the government of Mali. This dates back to 2024. Can you tell us the latest?
Bernard Aylward: Good morning, Stephen. The announcement went out today clarifying that we have had several discussions between ourselves and Hainan Mining Co. Ltd relating to this indemnity claim from Hainan, relating to the MoU signed with the Mali government for the transfer of the mining licence to our mining company in Mali. Hainan has claimed an indemnity under our financing agreement.
Our position was that the indemnity did not apply in this situation. Our discussions haven't led to a resolution, and we are happy to see it go to a third party for a decision. We know the arbitration process can take a lengthy period, and we expect during this process to continue discussions with Hainan Mining regarding the indemnity claim.
Proactive: Kodal Mining UK (KMUK) is 51% owned by Hainan and 49% by Kodal. How has this dispute affected the relationship with your joint venture partner, and is the underlying partnership still strong?
Bernard Aylward: You see this in lots of situations where there are disputes within a joint venture, but the underlying partnership remains strong. Both parties are dedicated to the advancement of the Bougouni Lithium Project. We are working very hard to make sure the project operates at its best capacity.
At our recent board meeting, we discussed at length the project plan for the stage two development and the significant work programme for 2026, where we intend to continue drilling, engineering studies and planning. The partnership for the development and operation at Bougouni remains very strong. The arbitration reflects that we have two parties with diametrically opposed views, and we need a third party to help resolve that.
Proactive: Give us an update on what's happening on the ground at the Bougouni Lithium Project at the moment. Are shipments still continuing?
Bernard Aylward: On site, we are continuing with mining and processing. We are reaching nameplate production, although we were slightly short in January and February. The operation has been going very well. Blasting and mining has improved, and we are building up the ROM stockpile to stay ahead of the wet season.
We are trucking product to port. Our second shipment left in early February. We received the initial 95% payment of just under US$24 million for just under 20,000 tonnes loaded onto that vessel. It is expected in Singapore within the next week and then on to Hainan shortly after. That side of the business is going very well, and we anticipate a third shipment in late March or early April.
We are selling into a very high-price lithium market, and our product is in strong demand. Our partner Hainan Mining is very keen to take all the product it can get. At Bougouni, it is running well. We are transporting to port, shipping to China, receiving income and operating well.
Proactive: Bernard, I hope you'll continue to keep us updated with your progress. Thank you very much for taking the time today.