AVZ Minerals calls for US$300m in tenders as it moves to develop Manono lithium-tin-tantalum project

AVZ Minerals ASX tenders pre-mining infrastructure develop Manono lithium tin tantalum project
AVZ Minerals will award the tenders once it has made its final investment decision for Manono.

AVZ Minerals (ASX: AVZ) has laid the groundwork for the first development stage of its Manono lithium and tin project in the Democratic Republic of Congo (DRC) by calling for a raft of pre-mining infrastructure tenders.

The collective value of the tenders is worth about US$300 million (A$431 million) and the accepted tenders will be awarded once AVZ makes its final investment decision to mine the Manono project.

Tenders cover engineering, procurement and construction of process plants, an intermodal staging station, diesel supply and storage, site buildings and enterprise resource systems.

AVZ expects to have final pricings on various tenders back in July and August.

Then, the company will be in a position to award contracts pending COVID-19 restrictions being lifted.

In another key move, AVZ has obtained preliminary membership of iTSCi — the ITRI Tin Association Chain Initiative, which monitors conflict financing, human rights abuses, bribery and other issues connected with mining supply chains for tin, tantalum and tungsten in the DRC, Burundi, Rwanda and Uganda.

Project financiers now expect mining companies to have iTSCi membership. It is estimated that AVZ’s application for full membership will take two months to be processed.

Managing director Nigel Ferguson said obtaining preliminary iTSCi membership is a significant milestone as it is viewed favourably by international financiers as part of their overall due diligence.

“The company will further invest in securing full membership in coming months,” he added.

Tin and tantalum are seen by AVZ as “beneficial” by-products of lithium ore processing at Manono.

Special zone discussions continue

In February, AVZ signed a memorandum of understanding with the DRC’s Ministry of Industry regarding the creation of special economic zone (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.

AVZ said those discussions are continuing, as they are with regard to offtake partners for the lithium, tin and tantalum production.

The company has signed non-binding Mo Us with several potential partners to allow pricing mechanisms to be refined and agreed to before a binding agreement is signed. That process is expected to complete within a few months.

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.

Mine product can be shipped through the ports at either Lobito in Angola or Dar es Salaam in Tanzania.

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