AVZ Minerals Shareholders to Appoint New Directors in Bid to Restore Trust
AVZ Minerals shareholders are set to convene at a General Meeting on November 23 to appoint three directors, with the primary objective of rebuilding trust with the Congolese Government and all stakeholders involved in the “Manono lithium” project.
The relationship between AVZ and government entities in the Democratic Republic of Congo (DRC) has soured significantly, six years after the Australian company, via its subsidiary AVZ INTERNATIONAL PTY LTD, acquired approximately 60% of the shares in “DATHCOM MINING.” This project aimed to raise funds for feasibility studies before the exploitation phase of a massive lithium deposit located in the Manono region of Tanganyika province.
Under the joint venture agreement signed in January 2017, AVZ was tasked with overseeing DATHCOM MINING, including appointing the Chairman of the Board of Directors, the General Manager, and the majority of administrators.
Despite AVZ’s key positions within DATHCOM, work on the ground came to a halt, the Exploration License PR 13359 was not converted into an Exploitation License, and the joint venture contract was terminated.
Eventually, the Exploration Permit PR 13359 was deregistered in the name of DATHCOM and returned to COMINIERE SA. In addition to these issues, the feasibility study covered only a third of the mining concession, and numerous conflicts arose between AVZ INTERNATIONAL PTY LTD (a 100% subsidiary of AVZ Minerals) and the majority of minority shareholders.
These disputes stemmed from both management opacity and recklessness, as well as AVZ’s attempts to acquire the majority of minority shares at nominal prices. Consequently, the project became entangled in multiple lawsuits before national and international courts.
As a result, AVZ Minerals shareholders are urged to unite during this upcoming general meeting and select leaders who possess conciliatory, experienced negotiation skills.
Observers emphasize that this is the only path for the Manono lithium project to thrive once more, benefiting the country, local communities, and both DATHCOM MINING and AVZ Minerals shareholders.
Some have already called on the appointed administrators to show respect for the Congolese State, COMINIERE SA (the mining title holder), and the rights of other partners by prioritizing negotiation over litigation.
While AVZ Minerals has reportedly initiated negotiations with the Congolese Government through the Ministry of Justice concerning arbitration before the ICSID in New York, it’s essential to note that DR Congo is not a shareholder in DATHCOM MINING. Its interests are duly represented by COMINIERE SA in the joint venture.
In the forthcoming management reconfiguration, AVZ Minerals will need to negotiate with:
COMINIERE SA, the mining title holder, representing the DRC’s interests with a 10% share in the joint venture.
DATHOMIR, with which AVZ Minerals had two contracts for the sale of 15% of the shares, both of which have been terminated.
JIN CHENG, which acquired 15% of the shares from COMINIERE SA.
Many believe that this approach offers the project a chance for rapid revival and development, as excluding other shareholders would perpetuate existing conflicts that hinder the project’s progress.
