AVZ Minerals eyes refurbishment of historic hydro-electric plant to power Manono lithium tin project

Lithium explorer AVZ Minerals (ASX: AVZ) has signed an agreement with the Democratic Republic of the Congo’s government to investigate refurbishment of the historic Mpiana-Mwanga hydro-electric power station on the Luvua River, 85 kilometres from its proposed Manono lithium-tin project mine.

The agreement was signed between AVZ’s wholly-owned subsidiary AVZ Power SAU and the Ministry of Hydraulic Resources and Energy.

It gives AVZ the rights to secure a long-term, exclusive lease to rehabilitate the power station and provide up to 54 megawatts of electricity to the company’s mining camp and associated infrastructure, the nearby Manono town site, and any future expansions including the incorporation of a 25,000 tonne per annum hydroxide plant.

At present, the town site uses diesel generators and a recently commissioned 1.5Mw solar system, while the mining camp is powered by a smaller 20Kva (kilo-volt-amperes) solar system with a diesel back-up generator.

Cheaper option

Hydro-electricity has been considered a cheaper option to the diesel scenario included in Manono’s current scoping study.

AVZ managing director Nigel Ferguson said it could potentially be used to power all mining equipment onsite, transforming Manono into a “green” project.

“From an economic perspective, [we are] likely to generate significant longer-term savings from generating [our] own electricity at an estimated 3-4 cents per kilowatt hour, as opposed to using diesel-powered generators at an estimated 42c/kWh,” he said.

“Ultimately, the electricity generated could be used to operate all of our mining equipment, as well as providing sufficient electricity to power the entire town site and rehabilitate associated power grids in the Manono territory.”

Staged development

Mr Ferguson said being in control of the rehabilitation process would allow AVZ to develop the hydro-station in phases which align with the Manono expansion program.

The first phase is planned to deliver approximately 18Mw of electricity from two turbines.

With the capacity for six turbines, he said the power station would be expanded to deliver additional electricity for the project’s dense media separation plus flotation operation.

The third third expansion phase would comprise the establishment of a hydroxide plant and create a combined power requirement of approximately 54Mw.

Offtake talks

Located in the southern DRC, the tier one Manono project has been confirmed as the world’s largest undeveloped hard-rock lithium resource in terms of grade, mine life and expansion potential.

It has a measured, indicated and inferred resource of 400 million tonnes at 1.65% spodumene, 715 parts per million tin and 34ppm tantalum.

Earlier this week, AVZ confirmed it was in talks with Chinese investors for lithium offtake produced from Manono.

At midday, shares in AVZ Minerals were steady at $0.055.