AVZ Minerals (ASX: AVZ) has scored its second deal with a Chinese battery manufacturer in less than a week, signing a memorandum of understanding with Beijing National Battery Technology Co Ltd (BNB).
The lithium explorer today announced the agreement, which should start the ball rolling for potential investment and offtake opportunities.
Headquartered in Beijing, BNB supplies lithium iron phosphate batteries for use in buses and cars.
It currently holds the dominant market position for the supply of batteries to China’s bus industry, with agreements in place with Yutong Bus, Zhongtong Bus, King Long Bus, Yaxing Bus, Higer Bus and Wuzhou Long Bus.
According to the company, BNB has purchase orders in excess of 2 million kilowatt hours and 5 billion yuan.
AVZ said talks with BNB had been ongoing for months. As part of BNB’s due diligence, which is already in progress, AVZ has invited the battery maker to visit its operations in the Democratic Republic of Congo to demonstrate the enormous potential of the company’s Manono lithium project.
AVZ executive chairman Klaus Eckhof said AVZ was excited to progress discussions with a company the size and calibre of BNB.
“The level of interest we are seeing in the company following our recent drill results confirms, once again, the Manono lithium project as a world-class asset,” he said.
Last week, the company also inked an MoU with Guangzhou Tinci Materials Technology Co, the world’s largest lithium-ion battery electrolyte manufacturer.
Drilling at Manono
Together with its DRC-based project partner Equator, AVZ commenced a 20,000-metre drilling campaign at the Manono project at the start of February.
In mid-February, AVZ reported the discovery of a massive 295.05m thick intersection of spodumene bearing pegmatite within its first drill hole of the program.
Last week, the company announced another large intersection from the Roche Dure pegmatite at Manono, this time measuring 282.95m in thickness.
This initial 20,000m forms part of a larger 40,000m resource drilling program, with plans for a JORC-compliant resource estimate to be calculated early in the second quarter of 2018.
The company has a conceptual target of 1.2 billion tonnes grading at 1.5% lithium.
AVZ owns 60% of the primary 188-square kilometre Manono tenement, as well as a 100% interest in 242.25sq km of surrounding tenements.
Shares in AVZ were up 6.4% on today’s MoU announcement by midday trade.