AVZ share price suspension: What is the Manono Lithium Project they are fighting over?

Why are AVZ shares staying suspended?

| More on:
Two people jump in the air in a fighting stance, indicating a battle between rival ASX shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The AVZ share price has been suspended for a while now but looks unlikely to return any time soon
  • The company is currently battling an ownership dispute relating to the Manono Lithium Project
  • The worst-case scenario could see AVZ become a minority owner

The AVZ Minerals Ltd (ASX: AVZ) share price is currently suspended and is expected to stay that way for at least the remainder of the month.

This is due to the lithium developer battling legal proceedings relating to the ownership of the Manono Lithium and Tin Project in the Democratic Republic of the Congo.

Last month China's Jin Cheng Mining Company launched arbitration proceedings in the International Chamber of Commerce in Paris. It is seeking to be recognised as a shareholder of Dathcom Mining, which is the owner of the Manono project.

The worst-case scenario could see AVZ's shareholding in the project reduced from a majority 75% ownership today to just a minority 36% ownership. This includes the proposed sale of a 24% stake to Suzhou CATH Energy Technologies.

What are they all fighting over?

The Manono Project is located 500km north of Lubumbashi in the south of the Democratic Republic of Congo.

It is home to the world class Roche Dure Mineral Resource, which is one of the largest undeveloped hard rock lithium deposits in the world.

The company highlights that the Manono Project is strategically positioned as a clean, sustainable source of lithium, significantly contributing to the green energy transition and feeding the global lithium-ion battery value chain.

Initial production is expected to be 700,000 tonnes per annum of lithium spodumene concentrate with 6% lithium oxide content (SC6) and 46,000 tonnes per annum of primary lithium sulphate.

It also comes with industry-leading ESG credentials and is forecast to be one of the lowest carbon emitting hard rock mines in the world.

When will the AVZ share price return?

At present, the AVZ share price will remain suspended until the end of the month.

However, the reality is that it could come back sooner or later than this date. Given the impact that the loss of a significant share of the project could have on the company's valuation, it is unlikely to return to trade while this dark cloud hangs over it.

So, investors may need to be patient and wait for this to be resolved before they see their AVZ shares trading again. Fingers crossed for a positive outcome.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Group of miners working at a coal mine with one smiling and holding up a piece of coal.
Materials Shares

How much upside does Macquarie project for South32 shares?

Is this miner's luck about to change?

Read more »

A group of miners in hard hats sitting in a mine chatting on a break as ASX coal shares perform well today
Materials Shares

Down but not out: Can these ASX mining shares bounce back?

Here’s what one broker is predicting for Australia’s largest mining companies. 

Read more »

Broker analysing the share price.
Materials Shares

Buy, hold, or sell? Broker's verdict on 3 ASX 200 materials shares

Materials was one of four market sectors that weakened in overall value in FY25.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why is this ASX mining stock crashing 14% today?

Let's see what is causing investors to hit the sell button on Monday.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

$10,000 invested in BHP shares in FY25 is now worth

Did the Big Australian outperform or underperform during the last financial year?

Read more »

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.
Share Market News

Why did Macquarie just downgrade Liontown resources shares?

Here’s what the broker had to say about this materials company. 

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why did Macquarie downgrade Mineral Resources shares?

The broker is no longer bullish on this mining and mining services company.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares rise 1% on trading update

Investors seem delighted by a new update from Brickworks.

Read more »