AVZ Minerals Secures $20 Million Funding Amid Legal Dispute over Manono Lithium Project in DRC
AVZ Minerals Receives $20 Million from Chinese Partner as Manono Lithium Ownership Dispute Continues
On January 15, 2026, Australian mining company AVZ Minerals announced it had received the full $20 million funding facility from its Chinese partner, Suzhou CATH Energy Technologies.
The cash injection comes as the Manono lithium project in Tanganyika, Democratic Republic of Congo (DRC), remains mired in a legal dispute between AVZ and the Congolese government, affecting country risk and access to financing.
While the announcement may appear purely mining-related, it carries significant financial implications. For projects of this scale, disputes not only raise the question of “who operates” but also “who finances it,” at what cost, and under which guarantees.
Investor Confidence Tested by Legal Dispute
AVZ had indicated when the agreement was established in January 2025 that the $20 million was intended to cover its cash flow and operations for 12 months, including legal costs associated with the DRC dispute. By releasing the funds, CATH demonstrates continued support for AVZ despite ongoing uncertainty.
The support is conditional. The 2025 agreement grants CATH significant rights should AVZ’s claims over Manono succeed. These include the option to acquire 100% of lithium production for five years—or until repayment of the funds advanced by CATH—and the right to purchase an indirect 30.5% stake in the project.
Such clauses reflect a classic industrial pre-financing structure: AVZ gains liquidity, while CATH secures future access to high-demand lithium, though the agreement remains conditional until ownership is legally resolved.
Manono Lithium: Africa’s Largest Untapped Deposit
The Manono deposit is considered the largest lithium deposit discovered in the DRC. AVZ conducted exploration for several years through a joint venture with the state-owned company Cominière, which later ended the partnership and, in 2023, partnered with Chinese firm Zijin Mining to develop the same project.
The dispute has elevated from a mining disagreement to a financial risk. AVZ has initiated multiple proceedings before international tribunals to contest developments around project ownership, with no final ruling yet issued. International arbitration plays a critical role in shaping investor confidence, as ongoing disputes influence country risk assessments, the cost of capital, and financing availability.
AVZ initially suspended its arbitration to facilitate amicable discussions but later resumed the process, indicating that a negotiated resolution has not yet been reached.
New Players Enter the Market
Meanwhile, KoBold Metals, a California-based startup, has entered the Congolese lithium landscape. Following U.S.-DRC investment discussions, KoBold signed a memorandum of understanding with the government in July 2025 for exploration, securing seven permits, including four in Manono. While exploration permits do not grant mining rights, they increase political and economic pressure by multiplying stakeholder claims over the same area.
KoBold is also expected to mediate the AVZ-DRC dispute to enable exploration, positioning the company as a de facto intermediary. Two months prior, KoBold and AVZ signed a framework agreement allowing AVZ to transfer its economic interests at a “fair value,” providing a potential mechanism to resolve the legal uncertainty outside arbitration.
Zijin Moves Ahead
Since 2023, Zijin Mining and Cominière have advanced administrative steps, receiving a mining permit in September 2024 for the disputed area, with production initially planned to start in 2026, though few recent updates have been shared on construction progress.
Financial and Strategic Implications
The Manono dispute highlights the challenges investors face in countries with contested asset ownership. Unclear legal frameworks increase financing costs, raise risk premiums, and heighten operational uncertainty.
The $20 million facility from CATH does not resolve the conflict but provides AVZ with the resources to maintain operations, pursue arbitration, and position itself as negotiations and new entrants continue to shape the industrial future of Manono.
