My thoughts
The Democratic Republic of the Congo's (DRC) ambition for vertical integration of lithium into batteries is contingent upon the production of the Manono mine. Despite the DRC's numerous meetings, it is unlikely to be taken seriously in the Western world, where investors are unwilling to risk their capital without tangible progress.
French President Macron addressed this issue directly by advising FT to focus on domestic matters instead of globe-trotting. Such frank remarks underscore the need for the DRC to address internal challenges before gaining international credibility.
Manono's value remains significant, regardless of the mining license's status. Although the current lithium spot market is relatively subdued compared to the peak it reached last year, it is important to consider the anticipated future surge in lithium prices during the mine's operational lifespan. Historical projections suggest that demand will outpace supply.
There is also a race to secure off-take agreements to ensure a consistent supply of lithium. Manono, provided the government upholds its own laws, is an ideal source for maintaining uninterrupted supply. This factor must be considered in evaluating the Dathcom/Manono project.
As an illustration of pricing trends, Lithium Carbonate reached CNY597,500 per tonne, equivalent to AUD$122,507 per tonne.
Lithium - 2023 Data - 2017-2022 Historical - 2024 Forecast - Price - Quote - Chart (tradingeconomics.com)
If Sin Bin has approached AVZ to acquire their interests in Dathcom, it can be assumed that the mining license approval has either been promised or is guaranteed, even if it has not been officially issued. Therefore, any negotiations with Sin Bin regarding the mine's purchase should proceed under the assumption of approved or guaranteed mining rights.
While it may appear that the DRC disregards its international image, public mockery and ridicule of government officials during their international trips would undoubtedly cause reputational damage on the global stage. This issue will be further accentuated through actions within the International Criminal Court (ICC) and the International Centre for Settlement of Investment Disputes (ICSID), involving key figures such as the President, Prime Minister, Ministry of Mines, and the World Bank.
If FT loses the elections in December, there could be a potential reshuffling of ministers, which might lead to a clean slate and potentially nullify previous commitments made to questionable actors, thereby facilitating the approval of the mining license.
Sharing factual information about AVZ's experiences on Twitter can be beneficial in shedding light on the situation.
In this context, alliances may form based on the principle that "my enemy's enemy is my friend."
Regards,
Silent - This is not advice but purely an opinion - do your own research
I fully support Nigel and his team