In August this year the Manono lithium project in Congo became the world’s largest non-brine Lithium procedure and supplier.
AVZ Minerals Ltd [ASX:AVZ] owns 60% of the Manono, with Congolese company Cominiere taking up the other 30%
By the end of November this year, AVZ Minerals had expanded its size after publishing the results of its drilling campaign. As reported by Mining.com, they have increased the size of the project by 400 million tonnes, to a grading of 1.66% Li2O 6.6m tonnes of lithium oxide.
But knowing how to invest in one of the hottest resources and the future of clean energy is a little challenging. Even when met with statistics that suggest a company like AVZ Minerals will do well.
That’s why Money Morning contributor Sam Volkering talks you through how to invest in lithium. From the tiny resource companies that can often shoot up overnight, to move towards green energy and how this will impact everyone’s future. You can read more about it here for free.
Lithium project set for global production rates
According to Roskill — a London-based research consultant firm — an operation at Manono with 10 million tonnes per capacity has the potential to produce over 300,000 tonnes per year of lithium carbonate equivalent. A rate of production that is approximate to the world’s production of all brine lithium operations.
Keep in mind, production rates have been cut in order for price corrections to take place. So the expansion in the Manono project and the resulting increase in production might not be a good thing for prices, at first.
When compared to other lithium projects, Roskill said:
‘Unlike some of its closest peers such as Clayton Valley, Sonora and Thacker Pass, which will require integrated plants, Manono hosts traditional pegmatite mineralization that can produce a spodumene-bearing concentrate for conventional conversion at existing refining facilities in China.’
‘An expanded processing capacity will ultimately bring some cost saving to the project through economies of scale, however, in our view the project’s main hurdle remains its location and the costs involved with transporting its concentrate to market. “Furthermore, in the near to medium-term as projects such as Greenbushes, Wodgina and Pilbara Minerals’ Pilgangoora ramp-up production, the market should have an ample supply of concentrate.’
The work is far from over for AVZ, the Manono project and its $110 million stock.
Long road ahead for Congo lithium project
There is still a long way to go for AVZ Minerals at the Manono project as its supply overhang has seen pressure from falling lithium prices.
On the other hand, AVZ has the backing of Citicorp, JP Morgan and BNP Paribas — which hold a combined 30%.
On top of this, lithium is handled as a strategic mineral by the Congolese authorities and the incurring royalties of 3.5% remain unchanged according to Mining.com.
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PS: Although there are a number of ASX-listed lithium stocks that you can invest in, choosing can be a daunting task for many. Luckily, we’ve complied an investors report on Lithium stocks to get you started.