PERTH (miningweekly.com) – ASX-listed AVZ Minerals has taken legal action to affirm its 75% interest in the Manono lithium and tin project, in the Democratic Republic of Congo (DRC).

The company has filed the first of two International Chamber of Commerce (ICC) arbitrations against Dathomir Mining Resources and expects to file the second arbitration shortly to seek affirmation of AVZ’s legal title over a 15% stake in the Manono project.

In 2019 and 2020, AVZ entered into two separate binding contracts to acquire a 15% stake in the Dathcom joint venture (JV), which holds the Manono project, from Dathomir.

In May last year, Dathomir claimed to terminate the agreements, but failed to cite any valid grounds, nor did it have the effect of terminating the agreements, said AVZ.

AVZ told shareholders on Thursday that the company had duly completed the agreements in August 2021, including payment within the required time period, thereby legally acquiring a further 15% interest in Darthcom.

Despite this, Dathomir has maintained its claims to have terminated the agreements and has denied the validity of AVZ’s acquisition under the terms of these agreements. A DRC Tribunal Decision in September granted Dathomir’s request for the interim suspension of payments of the purchase price under its agreements with AVZ, however, none of the defendants named were present or heard by the DRC Tribunal before Dathomir’s request was granted.

AVZ for its part has maintained that only a properly constituted arbitral tribunal had jurisdiction to rule on Dathomir’s claims.

Meanwhile, AVZ is also seeking to annul Dathcom JV partner La Congolaise d’Exploitation Minière’s (Cominière’s) $33.44-million deal with Zijin Mining Group Company subsidiary Jin Cheng Mining Company, over the sale of a 15% shareholding in Dathcom.

Cominière holds a 25% interest in Dathcom, and under a 2017 agreement between the JV partners, AVZ holds the right of first refusal on a proposed transfer of shares in Dathcom to third parties.

Cominière has, reportedly, transferred shares in Dathcom to Jin Cheng in breach of AVZ’s right of first refusal, and the company is now seeking to annul this transaction.

Jin Cheng instigated arbitration proceedings against AVZ before the ICC in May.

At the end of November, the DRC’s General Inspectorate of Finance released a report on Cominière’s management of mining assets in the company, and concluded that Cominière had acted in violation of its articles of association, acted contrary to the DRC Mining Code in respect of its transfer of mining licences without the transfer having undergone a prior assessment by the DRC government authority, and that the Jin Cheng sale was subject to "a number of irregularities".

Cominière was also found to have, reportedly, failed to comply with its JV obligations and had illegally transferred three mining exploration permits to third parties.

A previously completed definitive feasibility study into Manono estimated that it would produce around 700 000 t/y high grade lithium and 45 475 t/y of primary lithium sulphate over a 20-year mine life.

The project is expected to require a capital investment of $545.5-million, which will include transport upgrades and the rehabilitation of the Mpiana Mwanga hydroelectric power plant, which will account for $41.85-million and $46.54-million worth of investment, respectively.