The newly-elected government of the Democratic Republic of the Congo has approved a draft inter-ministerial decree relating to a co-operation agreement with AVZ Minerals (ASX: AVZ) over its Manono lithium-tin project.
The cabinet was appointed earlier this month by Prime Minister Jean-Michel Sama Lukonde and has been working with AVZ to progress the co-operation agreement, which includes the creation of a Manono Special Economic Zone (MSEZ).
The MSEZ is a fiscal incentive framework expected to deliver significant economic benefits to the historic project in the form of tax concessions and import duty relief.
The benefits will reinforce projected financial outcomes compared with those in the existing Manono definitive feasibility study (DFS) released in April 2020.
The study has undergone a first review and is being re-structured in preparation for release.
The receipt of draft approval within four weeks of the government assuming power has been labelled a “very positive step” for the project.
AVZ expects a formal decree to be signed before month end.
“The final co-operation agreement will deliver significant economic benefits for the project, and will further underpin our substantial investment in the region,” AVZ managing director Nigel Ferguson said.
“It will also deliver long-term benefits for the people of the Manono region including access to improved health and education services, stable employment opportunities and upgraded infrastructure including electricity supply.”
Mr Ferguson said the agreement would reinforce the government’s pledge to financiers that the Democratic Republic of the Congo is “open for business to the international investment community”.
AVZ is meanwhile advancing with the development of its flagship project.
The company is in the final stages of a FEED (front-end engineering and design) study and will re-run resource estimation figures on the back of all ‘wedge’ drilling data for input into the updated DFS.
Recently-completed hydrogeological work resulted in a water model suitable for bankable feasibility study level and for inclusion in the Manono process plant environmental and social impact assessment (ESIA) application, which will be submitted for approval by the local Agence Congolaise Environmental.
Power plant refurbishment
AVZ’s in-country team continues to work alongside government officials to finalise negotiations on a refurbishment of the historic Mpiana Mwanga hydro-electric power plant located along the Luvua River, approximately 85km east-south-east of the proposed mine site.
The plant was originally built in 1933 to service the historic tin mine but closed in 1982 when operations ceased.
The new-look facility would provide sufficient power for the project’s mining camp and associated infrastructure, as well as the nearby Manono town site and any future expansion of the mine site, including a proposed 25,000t per annum hydroxide plant.