Carlos Danger
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For those that don't read HC, the following analysis by a new account (@mitchelllangdon) was posted this morning;
Hi everyone, finally decided to upload my first post and weigh in here. I’ve been watching for years (and holding through the pain just like the rest of you), but after reading the full text of this new US–DRC Strategic Partnership Agreement, I think a lot of people are missing what’s buried in the Annexures.
If you actually read Annex 1 and 2, this treaty doesn’t name Manono, but it does set up a framework that strongly favours a US-aligned solution over a China-controlled one.
Here’s how I see it, without getting too bogged down in legal jargon.
The “Covered Nation” squeeze on Zijin
Annex 2 defines a “covered nation” by pointing to US law (10 U.S.C. § 4872). That list is China, Russia, Iran and North Korea.
Annex 1 then says that for a project to qualify as a Qualifying Strategic Project under this Agreement (and access the full “strategic” package – incentives, US-backed finance, Lobito focus, etc.), no more than 40% of the equity can be held by anyone who is not a US person or an “aligned person”. That cap then tightens over time to 30%, 20% and finally 10% over 20 years.
Chinese entities are explicitly outside the “aligned person” definition, so they sit in that capped bucket.
Zijin currently claims to own about 61% of the Northern Tenement JV (Manono Lithium SAS), with Cominière on 39%. That structure is basically incompatible with QSP status as written in the treaty.
The Agreement does not outright ban Zijin or stop the DRC issuing them permits. What it does mean is:
So while it’s not an immediate “kill switch”, it is a very deliberate structural squeeze on a Chinese-majority north.
- A Zijin-controlled north cannot be treated as a flagship “strategic” project under this framework unless their stake is cut back to a capped minority; and
- The DRC would have to walk away from a lot of US political and financial upside if it insists on keeping the current 61/39 Chinese-majority structure.
SOEs, Cominière and how the DRC can pivot
Article XIII requires the DRC to review the beneficial ownership and leadership structures of its mining SOEs and to endeavour to use those stakes to facilitate investment by US and aligned investors.
That obviously puts Cominière squarely under the microscope.
It doesn’t, by itself, void the Northern Tenement deal or magically strip PR15775. But it does:
If the DRC chooses to move the northern area into the new Strategic Asset Reserve (SAR), then under Article VII any new SAR project in that ground has to run through:
- Put Cominière’s arrangements into a formal governance review within a US–DRC strategic framework; and
- Make it politically and diplomatically easier to revisit deals that cut across ICC/ICSID decisions or earlier findings by DRC oversight bodies.
In that set-up, Zijin is highly unlikely to regain majority control. At best they’d be negotiating for a capped minority role under a US/aligned-led structure, if they’re in the tent at all.
- A right of first offer and initial negotiation window for US persons; and only
- If no US proposal is accepted, a window for aligned persons (which would include Australian companies).
So I wouldn’t say “game over” in a legal sense yet, but the rules of the game have definitely shifted against a Chinese-majority northern JV.
Why knocking back KoBold’s first swing makes more sense now
We know from AVZ’s update that the framework it signed with KoBold is non-binding and non-exclusive, and that AVZ is now running a competitive process with multiple US-aligned parties. KoBold doesn’t have this sewn up.
If KoBold’s first proposal effectively priced AVZ as a distressed litigant stuck in court, rejecting that and forcing a broader bidding process looks pretty rational in light of this Agreement:
My personal read is that AVZ likely had some visibility that a US–DRC strategic framework was coming and chose not to lock in a deal at “distressed” levels.
- AVZ has the data, the long-term work on the deposit and the legal claims over the original PR13359 area.
- The US needs a Manono outcome that looks bankable and rules-based, not like another headline about expropriation and ignored arbitration awards.
- The SPA architecture makes it much harder to simply ignore AVZ’s arbitration wins and hand a flagship lithium asset to a Chinese-controlled structure without undermining the whole “responsible critical minerals” narrative.
We don’t have official confirmation that there are exactly three US bidders, but we do know there is more than one party in the frame. This Agreement makes a US-aligned, unified Manono development the most logical end state if the DRC wants to maximise both money and political leverage. That’s where the “Super Pit” concept starts to look more than just a dream, even though the treaty itself does not literally reunify the tenements.
Why a buy-in or buyout still looks like the natural endgame
The Agreement gives US persons a right of first offer on SAR projects and only lets aligned persons (like AVZ as an Australian company) into the formal SAR process once the US window has played out.
It doesn’t say “push aligned partners out”, but it does structurally favour:
For that to happen cleanly at Manono, someone still has to resolve:
- A US-led operating consortium as the public face of any strategic Manono project; and
- Ownership structures where non-aligned players like Zijin are capped minorities over time.
The simplest way for a US operator to clear the decks is either:
- AVZ’s ICSID and ICC rights and awards;
- Cominière’s position; and
- The existing PR15775 allocation to Zijin’s JV.
Given the way the Agreement is written (emphasising US persons first and SAR/QSP incentives), I personally think a cash-heavy deal for AVZ is more likely than AVZ itself being the long-term partner, but that’s a deal-flow view, not a legal requirement.
- Buy AVZ out at a proper arbitration-informed price; or
- Bring AVZ in as a meaningful minority partner in a new US-led QSP/SAR structure, with clean title and clear offtake terms.
In my view, this Agreement is the US and DRC building a policy scaffold that:
It doesn’t instantly tear up Zijin’s licence, and it doesn’t guarantee a specific dollar figure for us. But it absolutely improves the odds that the Northern Tenement ends up folded into a US-aligned, unified Manono solution where AVZ is compensated at something above “distressed litigant” levels.
- Strongly discourages Chinese-majority control of flagship critical mineral projects;
- Puts Cominière and the whole Manono saga under much closer joint scrutiny;
- Channels strategic assets like Manono towards US and aligned operators using the Lobito Corridor; and
- Makes it much harder to sidestep AVZ’s legal position without scaring off the very US investors this treaty is designed to attract.
GLTAH. Hoping this works out for all of us. Do your own research, not financial advice.
His calculation: test the reaction of the United States, convinced that the silent support of certain networks would protect him once again.
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1. Threat of removing Rwanda from the SWIFT system
