Manono Lithium: the Australian group AVZ determined to defend its rights against the Chinese Zijin and Cominière
November 6, 2023 Faustin KUEDIASALA 0
In Manono, in the province of Tanganyika, the lithium project took on another dimension with the creation, against all expectations, of the company “Manono Lithium”, born from a partnership between Cominière, a company in the Portfolio of State, and the Chinese Zijin Mining. The creation of this company was done in emergency mode. This is evidenced by the filing of a request for an emergency decree to formalize its creation. Particularly aggrieved, the Australian AVZ, Cominière's partner in Dathcom Mining, is not waiting to give in. The AVZ group is turning to international justice to defend its rights in Dathcom. Like the Canadian First Quantum Minerals under Kabila, AVZ fears reliving the same episode of expropriation in the Manono project.
Lithium mining is, once again, at the center of a lively controversy following the creation between Cominière and the Chinese Zijin Mining of a company, called “Manono Lithium
” .
With this creation, Cominière has trampled underfoot the partnership that has always linked it to the Australian group AVZ within the framework of the Dathcom joint venture, relating to the same Manono project.
Following the creation of “Manono Lithium”, the reaction of the Australian AVZ was quick.
AVZ's response to the announcement of the creation of “ Manono Lithium ”
In a detailed press release dated October 30, 2023 for everyone, AVZ Minerals provided the update to the shareholders of the “Maono Lithium” Company, Cominière, Zijin and public opinion before an international court to secure its rights in the Dathcom Mining joint venture.
Indeed, as Kiki Kienge of the online media CongoPress well writes, this legal action by the AVZ group follows the announcement of the Chinese group, Zijin Mining, which claims through its subsidiary in the Democratic Republic of Congo, Jinxiang Lithium, having concluded an agreement on the Manono lithium deposit in the province of Tanganyika, in DR Congo, a deposit valued internationally by the feasibility study carried out by the Australians of AVZ Minerals using its own financial and technical means.
Since the Chinese of the creation of a joint venture with the Congolese State, in this case Manono Lithium, through COMINIERE and the ownership right of PR15775, there has been no reaction from the Congolese authorities to deny or certify Zijin's statements.
However, within 60 days of signing, the authorities and institutions of DR Congo should publish this agreement as required by the country's mining legislation. To date, there is silence from Kinshasa on the exit of the Chinese group Zijin.
For information, PR15775, granted to the joint venture Manono Lithium (joint venture between Cominière and ZIJIN), is part of PR13359 which belongs to the joint venture Dathcom Mining SA, joint venture between Cominière, Dathomir of Simon Cong Maohuai and Australians from AVZ Minerals .
According to indiscretions, the Chinese of Zijin claim to have 61% of the shares of PR15575, against a consideration of 33,4000,000 USD from the “illegal” sale of 15% of Dathcom Mining and should pay 70 million USD in humanitarian aid , payable, we learn. on, according to a modality and period which remain ambiguous.
AVZ breaks the silence
Contrary to its strategy, the Australian group AVZ has just reacted to the alleged agreement between the Congolese State, via Cominière and the Chinese of ZIJIN, of October 23, 2023 on the creation of Manono Lithium SAS based on PR15775:
Indeed, AVZ refers to the announcement made by Zijin Mining Group Co Limited (Zijin), on October 23, 2023, according to which its subsidiary Jinxiang Lithium Limited (Jinxiang) has entered into a joint venture with La Congolaise d'Exploitation Minière ( Cominière ) under which Jinxiang holds 61% of the shares of Manono Lithium SAS, which would hold PR 15775 on a northern part of the Manono project.
The Company, through its subsidiaries, has decided to file an application for emergency arbitration under the ICC Rules in order to obtain an injunction against Cominière for the purpose of prohibiting the Company of State to conduct, directly or indirectly, any transaction concerning PR13359 and PR15775 and, generally, to carry out certain actions with a view to maintaining and preserving the rights of Dathcom Mining SA (Dathcom) while the arbitration on the background is in progress.
The request also aims to obtain an increase in the amount of the daily penalty ordered by the order of the emergency arbitrator of May 5, 2023 (see the Company's announcement of May 8, 2023 “Favorable decision in the procedure of "ICC Emergency Arbitration
against Cominière ") which provides:
"Cominière's recent actions to terminate the Dathcom Mining Joint Venture Agreement dated January 17, 2017 as amended from time to time (JV Dathcom), to act as holder of PR13359 and to attempt to monetize said mineral rights from third parties all constitute violations of the terms of the Emergency Arbitrator's order dated May 5, 2023. ”
The AVZ group also has a series of observations.
The 15% of the capital of Dathcom Mining illegally sold in fire sale in Zijin by Cominière
When Zijin declared that his payment to Cominière of $33.44 million for the 15% of Dathcom's shares would be "transferred to the joint venture for compensation" against the consideration payable by Jinxiang for his 61% stake in Manono Lithium SAS, the AVZ Group believes that “
this recognition of the fact that the purchase price of the 15% of Dathcom shares was redeployed is inconsistent with Zijin's assertion that its subsidiary Jin Cheng Mining Company (Jin Cheng) is a 15% shareholder. % of Dathcom Mining ”.
It should be noted that the announcement of the creation of “Manono Lithium” was made shortly after the hearing in case ICC 26986/SP on October 5 and 6, 2023, during which AVZ presented its thesis according to that the sale of the 15% of Dathcom Mining's shares was "
ineffective, either due to the violation of AVZ's right of pre-emption under the Dathcom Mining joint venture, or due to the circumstances in which this agreement was entered into by Jin Cheng and Cominière, some of which were addressed in the IGF report dated November 30, 2022. ”
It appears that Zijin and Cominière recognized that AVZ was right and that Jin Cheng was not and had never been a shareholder of Dathcom Mining. Furthermore, the ICC Tribunal was informed of Zijin's announcement, the terms of which justify AVZ's position in the arbitration.
The “ North Zone ” of the Dathcom License illegally allocated to Zijin under Manono Lithium
In its observations, the AVZ group indicates: “
Having apparently abandoned its attempt to appropriate a 15% stake in Dathcom, Zijin is on the contrary pursuing, in collusion with Cominière, a new strategy of appropriation of the northern zone of the project Manono as well as the part containing the workers' camp and the Dathcom Mining sample conservation hangar. The allegation that Manono Lithium SAS owns PR 15775 on the northern part of the Manono project has no legal basis. This northern area includes the Carrière de l'Este, Malata and Kahungwe deposits, the reconstructed Manono Hill construction camp and administrative center, and the central courtyard and main farm of Dathcom Mining which houses the mining library. 'samples '.
AVZ maintains that Dathcom Mining is the holder of PR 13359 for the entire Manono project (including the North zone) and that it is the applicant for an exploitation permit (EP) for this land. AVZ has taken advice and is confident in its position.
“
The objective of the ICSID procedure, which was initiated by AVZ on May 8, 2023 and registered on June 8, 2023, is to establish it in an authoritative manner. Until now, AVZ has tried to avoid publicly expressing its position in case it is perceived as critical of certain government institutions in the DRC. Unfortunately, the Fat Tail candidates sought to interpret the lack of available information regarding AVZ's position as reflecting a lack of merit and instead assumed, without any apparent understanding of DRC law, that the results obtained by Zijin and Cominière were legal and effective . comments an internal source from the Australian group.
With regard to AVZ's position, it should be noted that: "
1. the register of mining tenements kept by CAMI has the function of informing the public of decisions taken under the Mining Code concerning mining tenements, but the entry of a decision in the register has no legal effect and does not serve to validate decisions contrary to the Mining Code; 2. the ministerial decrees of January 28, 2023 annulled the ministerial decrees of April 7 and April 25, 2022 and restored the status quo according to which Dathcom Mining is the holder of PR 13359 and applicant for the EP on the entire Manono project; 3. the decision of the Kalemie High Court of May 3, 2023 ordering CAMI to register PR 13359 in the name of Cominière is contrary to the law because:
– it is based on the fact that the Dathcom Mining joint venture was validly terminated, which is incorrect (and will be examined by the arbitral tribunal in case ICC 27720/SP);
– a valid termination of the Dathcom Mining joint venture would provide no legal basis for transferring PR 13359 to Cominière;
– Dathcom Mining did not have the opportunity to be heard and had to request a new hearing (third-party opposition) which is in progress;
– the Kalemie High Court does not have jurisdiction to order the transfer of the RP; 4. the ministerial decree of October 12, 2023 which would have extended the duration of PR 13359 until December 27, 2027 is contrary to article 49 of the Mining Code which provides that the mandate of PR 13359 (which would otherwise have expired on December 27 2021) is extended sine die until the EP request is decided; and 5. any decision to waive or relinquish rights to the northern part of PR 13359 or transfer the northern part of PR 13359 is contrary to the Mining Code because only the legitimate holder of PR 13359 is legally entitled to take such measures. It follows that PR 13359 held by Dathcom Mining remains in force with regard to the entire Manono project and that PR 15775 could not be legally granted to Manono Lithium SAS with regard to the northern part of the project. Manono .”
This remains to be determined authoritatively within the framework of the ICSID procedure, the experts note, however, they believe that "
AVZ seeks to uphold the rule of law in the DRC and the suggestion of the Fat Tail candidates that ICSID procedures are unnecessary or misguided is not correct .”
In any case, within the AVZ group, we expect to see the procedure through to the end: “
It is worrying to note that certain officials seem to have been led to make decisions relating to PR 13359 and PR 15775 which are contrary to the law and which, if applied, would have the effect of appropriating the legitimate rights of Dathcom Mining for the benefit of others. Unless immediate action is taken by the State to correct the relevant records to reinstate PR 13359 in the name of Dathcom Mining and on the entire Manono Project, AVZ will have no choice but to request an emergency assistance to ICSID” .
Regardless, Nigel Ferguson and the AVZ team remain in the DRC and continue their efforts to advance the negotiation of the Memorandum of Understanding with the State. The execution of the MOU by AVZ and the State will pave the way for the resolution of the ICSID proceedings without further escalation.
At first glance, the Congolese State, acting via Cominière, is at fault across the board. “
By obtaining the alleged concession of PR 15775 from Manono Lithium SAS, Cominière acted in contempt of the Mining Code. In addition, Cominière acted in violation of the Dathcom Mining joint venture as well as the CCI's emergency order dated May 5, 2023, the latter aimed at preserving the status quo, in particular by prohibiting Cominière from taking measures to implement its alleged termination of the Dathcom Mining joint venture ,” it is said in specialist circles.
AVZ will inform shareholders and the public of the outcome of its request for emergency measures before the CCI as soon as the outcome is known, concludes the company's public document in our possession.
DR Congo sells 61% of Manono Lithium's PR15775 to the Chinese ZIJIN for USD 103 million and keeps 39% of the new project.
In her publication of October 24, 2023, Kiki Kienge of CongoPress wonders: “
At the price evaluated by the General Inspectorate of Finance on the sale of Cominière to Zijin, based on the Feasibility Study of Dathcom, including Cominière and the Government must have copies , and carried out by AVZ, of which all the favorable legal opinions required by the Mining Code of the DRC have been given by the government technical services, should the 61% of MANONO LITHIUM of PR15775 not be worth more or less 650 million USD? »
Almost silently announced on the Mining Cadastre (CAMI) portal under the heading “
Application 15775, request for partial transfer. » As a reminder, application 15775 concerns the North-East part of mining permit PR13359 from Dathcom Mining.
We remember that after a standoff between the two partners Cominière and AVZ, the Minister of Mines, Antoinette Nsamba Kalambayi, canceled the conversion of Research Permit (PR13359) into Exploitation Permit (PE13359). Secondly, by decree, it had brought together the two parts of PR13359 and had acted by “
returning ” to Cominière 100% of PR13359.
“
Illegal and irregular administrative acts ”, recognize Dathcom, AVZ and experts in Congolese mining law.
A few days after the announcement of the famous “Application on the CAMI portal”, the Chinese group Zijin announced that application 15775 had just been transformed into a Research Permit, P15775, by the Congolese authorities. On its portal, CAMI confirmed in particular that the remaining PR13359 now belongs entirely to Cominière SA.
“
A serious blow to mining governance for which civil society and the press have been fighting for some time in the DRC ,” said a civil society actor working in the natural resources sector, with disappointment.
The new PR15775 would now belong to the joint venture, Manono Lithium SAS, of which the Chinese group, Zijin, would own 61% of the shares and the Congolese State through Cominière, 39% of the shares.
According to Zijin's press release, the Chinese should, or have "
already paid " a sum of 33 million USD, according to the old agreement deemed illegal by the General Inspectorate of Finance (IGF), for the 15% of Cominière's shares. in Dathcom. In addition, the Chinese from Zijin will add 70 million USD, to reach 103 million USD in order to own 61% of Manono Lithium which now owns PR15775.
These figures have yet to be confirmed by Cominière and the Congolese state, which has opted for silence to date.
However, last year, the IGF had valued at least 150 million USD the 15% of Cominière's shares sold to Zijin, or 10 million USD for 1%.
“The Board of Directors and directors of the company guarantee that there is no false information, misleading statements or major omissions in the content of the announcement and take legal responsibility for the authenticity, of the accuracy and completeness of its content in accordance with the law . On October 23, 2023, the joint venture between the overseas subsidiary of Zijin Mining Group Co, Ltd (Jinxiang Lithium) and Cominière, Manono Lithium, Jinxiang Lithium holds 61% of the shares and Cominière holds 39% of the shares, obtained the approval of the Ministry of the mines of the Democratic Republic of Congo, rights for the northeastern part of the Manono lithium deposit (PR15775),” indicates part of the press release from Zijin (Jinxiang Lithium).
Tshisekedi does to AVZ what Kabila did to FQM
According to several observers of the DRC mining sector, what is happening to Dathcom Mining is an illegal expropriation similar in all respects to that of the mining permits of the Australian-Canadian group First Quantum Minerals (FQM) under the Kabila regime of sad memory.
What's worse, this expropriation reflects a lack of long-term vision of the mining sector, the management of critical and strategic minerals, and a biased understanding of global geopolitical and geostrategic issues on the part of the power in Kinshasa which offers on the plateau of gold and at a low price the strategic sector of lithium, a critical and strategic mineral, without taking into account serious consequences in the short, medium and long term, while the Chinese, who already control the copper and cobalt sector of countries, have disputes with the Congolese State or their partner Gécamines, among others, at Sicomines. Moreover, these same Chinese are regularly singled out by reports from local civil society for violations of economic, environmental and social human rights. This is the case of Commus and Kamoa, where the famous Zijin is also questioned.
For Congolese civil society, in particular the
“Coalition Tous Pour la DRC” which has been interested in this issue since last year, the only fair outcome remains an amicable arrangement without Zijin or another Chinese group between the State Congolese, owner of Cominière, and the Australian group AVZ which has invested enormously in the development of the lithium permit coveted by the Chinese.
The Chinese, however, are keen to secure their supply chain for this critical mineral and consolidate their lead over the United States of America and the West in their economic war, without worrying about the community development of the Congolese of Manono and Tanganyika who believe in AVZ and Dathcom Mining, now victims of a wild and gluttonous appetite from Chinese companies.
One thing is true: Americans and other Westerners, particularly those from the Commonwealth as well, observe closely – in silence of course – everything that is done. Just like the Chinese, they need critical minerals from the DRC in the face of Chinese competition and dependence.
c
By Ben Nkaya for FKF Softpress.
AVZ reiterates its position on the favorable decision in the ICC emergency arbitration procedure against Cominière
AVZ (or Company) once again refers to its previous announcements dated April 17, 2023 and May 8, 2023 entitled respectively “New legal action to assert interests in the Manono Project” and “Favorable decision in the arbitration procedure of the ICC against Cominière” in the context of arbitration proceedings before the International Court of Arbitration of the International Chamber of Commerce (ICC) against Congolaise d'Exploitation Minière (RCCM 14-B-5938).
As a reminder, as part of the arbitration proceedings against Cominière, the Company, via its subsidiaries and Dathcom Mining SA (Dathcom), filed a request for emergency arbitration according to the rules of the ICC, heard by an arbitrator on May 3, 2023 , seeking an injunction for the purpose of restraining Cominière from taking any action regarding its alleged termination of the Dathcom Joint Venture Agreement (Dathcom JVA).
AVZ considers that Cominiere's purported termination of the Dathcom JVA is unlawful because it was attempted without good cause and in a manner contrary to the express terms of the Dathcom JVA.
The emergency arbitrator found that she had jurisdiction to order emergency measures and ruled in favor of the company's emergency request. The emergency arbitrator's order, dated May 5, 2023, provides as follows:
• Cominière may not undertake
any action or
take any measure that would result from the implementation of the termination of the Dathcom JVA and/or the consequences of such termination, until the final award on the merits of the procedure Cominière's broader arbitration decision is made. ;
• Cominière must comply with article 11.1 of the Dathcom JVA (ie the obligation to resolve any dispute by arbitration before the ICC) and refrain from initiating any dispute in relation to the Dathcom JVA and/or the termination that it claims to have carried out, before the courts of the Democratic Republic of Congo (DRC), until the final award on the merits of the broader Cominière arbitration proceedings was rendered;
• any violation of the above-mentioned orders will be punishable by a penalty of 50,000 euros per day of violation and any dispute relating to the liquidation of the penalty will be reserved to the arbitral tribunal within the framework of the arbitration procedure of the Cominière, who will rule on the question of the validity of the termination of the JVA;
In accordance with this emergency order, AVZ considers
any attempt to dispose of the assets of Dathcom Mining by any party invoking the so-called resolution of the joint venture agreement (Dathcom JVA) to be in violation of the order of arbitration judge and therefore illegal .
AVZ will continue to rely on legality to defend by all legitimate means the interests arising from the joint venture agreement (Dathcom JVA).
The Australian government is closely following the AVZ file: Kinshasa must avoid replicating the expropriation to the FQM (see attached document)
