AVZ Minerals (ASX: AVZ) has just concluded two days of discussions with officials in the Democratic Republic of Congo planning special economic zone (SEZ) for its proposed Manono lithium-tin mine.
In February, AVZ signed a memorandum of understanding with the DRC’s Ministry of Industry regarding the creation of a SEZ at Manono, which is located in the Tanganyika province of the country.
The province lies on the western coast of Lake Tanganyika, the body of water through which the DRC-Tanzania border runs.
The SEZ would provide AVZ with several economic benefits, including exemptions or reductions in corporate taxes and duties.
The company and representatives of key DRC government agencies met at a two-day workshop this week.
Officials came from the ministries of industry, finance, economy, environment, mines, hydraulic resources and electricity, as well as from the National Agency for Industrial Promotion.
Apart from the SEZ, the discussions included the potential for private public partnerships.
Hydro, road and bridge projects discussed
The company presented its case for a SEZ, including its plans for rehabilitating the Mpiana Mwanga hydro-electric station, road upgrades and a crossing over the Lualaba River, each of which are anchor activities connected with the development of the Manono mine.
Mine product can be shipped through the ports at either Lobito in Angola or Dar es Salaam in Tanzania.
A SEZ provides for an investor to enjoy exemptions or reductions, either permanently or temporarily on direct or indirect taxes, domestic duties and taxes, national, provincial and municipal royalties as well as import and export duties.
AVZ managing director Nigel Ferguson said making progress on the SEZ proposal over the past few months had been difficult due to the COVID-19 travel bans imposed in the DRC.
But he was excited by recent progress made with the Congolese government.
“A positive outcome will result in significant economic benefits for the company and the Manona Territory … as well as delivering a major catalyst for the redevelopment and invigoration of the socio-economic pulse of the Manono region,” Mr Ferguson added.
The recommendations from the two-day workshop will be sent to the country’s Prime Minister Sylvestre Ilunga for approval.
The definitive feasibility study for Manono showed a pay-back period of 1.5 years pre-tax, a mine life of more than 20 years and pre-production capital of US$545.5 million including transport upgrades and rehabilitation of a hydro-electric power plant.