AVZ and Bezos-backed miner KoBold Metals in standoff over deal the White House wants done
Brad Thompson
Donald Trump’s administration wants a deal done between AVZ Minerals and KoBold Metals for control of the Manono lithium project in the DRC. Picture: AFP
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19 hours ago
China is back in contention to control all of a vast lithium project in Africa amid a standoff between Australian company AVZ Minerals and a US company backed by Bill Gates and Jeff Bezos.
The impasse between AVZ and KoBold Metals has left the door open for Chinese interests to reassert claims to the entire Manono project in the Democratic Republic of Congo against the wishes of the White House.
A deal between AVZ and KoBold over the southern half of the Manono project shaped as a key component of a critical minerals pact between the Trump administration and the strife-torn DRC, and a blow to China’s interests in Africa.
However, AVZ is clearly frustrated and on Monday reiterated its legal claims and victories in international arbitration that have been largely funded through support from heavyweight Chinese lithium-ion battery maker CATL. The legal backing has created a pathway for CATL to eventually own all of Manono.
DRC President Felix Tshisekedi tweeted details of an in-principle deal between his resources-rich nation and KoBold late last week. He said the deal, signed in Kinshasa, cleared the way for KoBold to apply for exploration permits covering Manamo and to digitise the nation’s geological data.
There are suggestions the US and the DRC could sign a critical minerals pact in Washington in about six weeks’ time, with the standoff with AVZ shaping as a major stumbling block.
The DRC sought US help in the face of Rwanda-backed M23 rebels causing havoc and overrunning parts of the country, with US President Donald Trump congratulating the DRC on a peace deal with Rwanda signed last month.
AVZ said it was not involved in the drafting nor a party to the deal between the DRC and KoBold, in a sign of tension between the parties.
“It (AVZ) remains open to constructive dialogue with the parties, to agree a suitable commercial outcome for AVZ shareholders, where its legal rights and existing commercial relationships are respected,” the AVZ board, chaired by John Clarke, said in a statement.
“The company confirms that discussions continue with various parties including KoBold, who wish to advance the development of the Manono project to better balance global lithium supply chains, benefiting all stakeholders, not least the people of the DRC.
“Should these discussions result in any binding commitment, then the company will appropriately advise its shareholders at that time.”
AVZ and Kobold have been unable to agree on a price for AVZ’s stake in Manono since issuing a joint statement in May.
The Australian has reported that AVZ might walk away with up to $1.5bn and a royalty. However, KoBold clearly wants to pay far less in cash upfront given the risks in the DRC and the depressed lithium market.
AVZ’s market capitalisation reached $4.6bn in 2022 on high hopes for Manono but plunged amid a dispute over ownership of the massive hard rock deposit that ultimately led to its delisting in 2024.
In their May statement, AVZ and KoBold said they recognised that “rapid, ethical development of the Manono lithium deposit should play a role in supporting peace and security”.
AVZ Minerals non-executive chairman John Clarke
“This framework entails AVZ selling its commercial interest in the Manono lithium deposit to KoBold for fair value,” they said.
“The agreement will enable KoBold to rapidly deploy more than $US1bn to bring the Manono lithium to Western markets.”
It is understood AVZ wants to wrap up a deal with KoBold in the next 30 days and before the signing of any critical minerals accord between the US and the DRC.
AVZ’s bargaining chips include recent victories in the International Court of Arbitration of the International Chamber of Commerce (ICC) and the support of CATL, which listed on the Hong Kong stock exchange earlier this year.
A CATL subsidiary already owns part of AVZ and, through a deal revised in January, kicked in another $20m to fund the legal fight with the DRC over Manono.
The deal cleared the way for CATL’s Suzhou CATH Energy Technologies (CATH) to pay AVZ $US259m for a 30.5 per cent indirect interest in the Manono project, and to ultimately own all of the project.
Manono boasts an 842 million tonne resource at 1.61 per cent lithium oxide and is split into two geographically distinct northern and southern deposits. The southern part alone, sometimes referred to as Roche Dure, holds a 669 million-tonne resource.
AVZ maintains the DRC acted illegally by taking over its permit over the whole of Manono and then awarding the northern portion to Chinese mining company Zijin in September 2023.
The US has indicated in recent months it is willing to back AVZ retrieving the southern licence to minimise antagonising Beijing, given that Zijin is well advanced in developing the northern deposit.
It is understood both the US and KoBold favour a change of ownership based on AVZ and the DRC discontinuing legal action.
There is no standoff with AVZ. We have made it clear we're ready to move forward with this and get the hell out.
Just pay us our $12
Stumbling block it would appear is Kobold. But I think what looks like them stumbling is actually trying to do a bit of a dance.
Don't dance around the price too long KoBold. China doesn't dance, they will just walk in and take it from you otherwise.
What exactly is it Kobold brings to the table other than cash? We already 'found' the resource without old-school intelligence. Geopolitical influence? Only good in so far as you can turn it back into cash.
I still believe they are also just playing hardball and when push comes to shove they will pony up the right combination of cash/royalties/scrip. But CATH has offered us a viable and profitable path forwards so onus is on KoBold to convince us to walk away from that. Any wishy-washy 'statements of support' from GDRC dont mean shit so the field is still wide open to anyone else that wants to step in.
For those that think this MUST be tied up in the M4S deal:
That only means AMERICAN involvement. It does NOT mean exclusively KoBold.
If that's your position, then it makes it harder for CATH,sure. But it doesn't mean Kobold are running a 1-horse race as they try to make it look.
