lithium

AVZ Minerals is continuing to advance the DFS on its Manono lithium and tin project in the Democratic Republic of Congo (DRC).

The project, which is said to be one of the largest undeveloped lithium-rich, tantalum pegmatite deposits in the world, looks set to be the front-runner in the race to unlock this sought-after battery mineral in the central African country. CHANTELLE KOTZE writes.

This article first appeared in Mining Review Africa Issue 12, 2019
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Despite the current weakness in lithium pricing, with spodumene prices down from above US$900/t in early 2018 to around $560/t currently, as a result of lithium oversupply, lithium consumption volumes are expected to catch up with production volumes as soon as 2021, with prices expected to increase to $1 000/t within the next 10 years.

This will be in line with the surge in demand from the burgeoning electric vehicle (EV) market where lithium-ion batteries dominate, which is currently and will continue to be driven higher as vehicle manufacturers in Europe, USA, North America and South East Asia commit to producing more and more EVs in a bid to decarbonise the global transportation sector.

The lithium oversupply has been a result of global trade tensions which has slowed growth and resulted in the scaling back of Chinese EV subsidies, higher tax on importation of lithium hydroxide material as well as bottlenecks in the mainly Chinese downstream chemical conversion industry, undermining lithium demand.

A spotlight on Manono

The Manono project, which is located about 500 km north north-east (NNE) of Lubumbashi, comprises an exploration permit covering 242.25 km2 surrounding the world-class historic Manono tin mine.

Read: AVZ Minerals begins ESIA studies at Manono project

The Manono pegmatite deposit, which has a strike length of at least 13.5 km, is centred on an historical tin mining operation which was mined for its tin content between 1918 and 1982.

AVZ Minerals has confirmed two large sectors within the Manono project containing six large pegmatites, all of which contain spodumene mineralisation – the two largest pegmatites in the two areas being Roche Dure in the south west and Carriere de l’Este in the north east.

Based on detailed prospect scale mapping, trenching and drill results since acquisition in 2016 until now, and given the size and mineralised nature of the pegmatites at Manono, AVZ Minerals has generated a conceptual exploration target of between 1Bt and 1.2Bt of 1.25% to 1.5% lithium across several pegmatites for the entire Manono project.

Read more about mining in central Africa

The Roche Dure pegmatite, on which the company’s current mineral resource is based, now stands at 400 Mt at 1.65% lithium, 719 ppm tin and 34 ppm tantalum as reported in May 2019 and includes 269 Mt of measured and indicated resources – one of the largest and highest grade undeveloped hard-rock lithium deposits in the world.

Expanding lithium production

Following an initial 2 Mtpa scoping study which delivered a robust set of results including an NPV (10%) of $1.6 billion, IRR of 98% (pre-tax, pre-royalties), AVZ Minerals completed an expanded 5 Mtpa scoping study in May 2019 which further strengthened the economic potential of the project, with an NPV (10%) of $2.65 billion ($1.5 billion of which would go to AVZ Minerals based in its 60% shareholding in the project).

The DFS study currently underway is predicated on the 5 Mtpa scoping study and is expected to be completed by the end of Q1, 2020. It plots out the plan to develop Manono in three stages – the first stage entailing a DMS only recovery producing SC6.0% concentrate (12-month construction period post stage one at name plate capacity), the second stage combining DMS with an added comminution and flotation circuit (12-month construction period by year three) and the third stage adding a hydroxide circuit. This hydroxide plant will produce a battery grade lithium hydroxide for use in battery manufacture.

During the 5 Mtpa scoping study work (which will be further refined in the DFS), AVZ Minerals reviewed several methods of transhipment of concentrate from Manono to the port of Dar es Salaam in Tanzania – a significant operating cost that represents over 60% of total operating costs.

Read more about battery metals

The chosen method of transhipment, which has proven to be most cost effective involves road transport of loose bulk concentrate from Manono via Pweto or Lubumbashi to a rail siding at Nseluka, rail freight on the Tazara system to Dar es Salaam, stockpiling in Dar es Salaam, and loading rotor box containers for rail transport to port for loading onto bulk carrier ships in the Port of Dar es Salaam.

In order to better understand the current and proposed infrastructure to transport Roche Dure concentrate via the port of Dar es Salaam in Tanzania, Ferguson met with high ranking officials from Tanzania’s rail, port revenue and investment promotion authorities.

Further meetings have strengthened the working relationship and a full technical due diligence on the facilities, rail and rolling stock have now been completed.

Making the grade

To increase its confidence that the Manono project will continue to develop into production and potentially become a significant source of lithium and tin, AVZ Minerals shipped 14 t of metallurgical core samples taken from the Roche Dure pegmatite for two-phase metallurgical testing, the results of which will allow DFS lead engineer, GR Engineering Services (GRES), to rapidly advance the Manono DFS.

Phase 1 of the metallurgical test work programme to better understand the metallurgical characterisation was completed in September 2019 and confirmed that the characteristics of the deposit are well understood, that the deposit is homogeneous and is very clean – with low levels of deleterious elements within the pegmatite – with iron, mica, fluorine and phosphorous well within acceptable levels within the concentrate.

The Phase 2 metallurgical test work programme, to be completed at the end of December 2019, is aimed at supporting and verifying the optimal process scale and flowsheet selection, examining ore variability and its effects on economic performance, performing all necessary engineering and vendor testing, as well as generating spodumene concentrates for marketing assessment by potential offtakers.

The completion of all the test work and studies will be fed into the DFS and will enable AVZ Minerals to begin with the preparation of EPC tender packages in Q1, 2020.

In terms of early works, the company also intends to order its long lead items at the same time as tendering the EPC package as a means to de-risk the construction duration of the project and to begin some of the infrastructure development – provided that the exploitation permit is awarded by the government.

DFS advancing well

The DFS field programme at Roche Dure is gaining momentum with accelerated dewatering of the Roche Dure pit, expected to be completed in December 2019.

The dewatering of the Roche Dure pit (water that has collected in the pit from rainfall) will enable the start of the pit floor drilling programme, which is aimed at drilling a sufficient number of tons of the pit floor to bring this into the measured resource category – further increasing the mineral resource at Roche Dure.

Indicative slope design angles within the pit are expected to be available around mid-December which will then be used to determine the mine design of the initial open pit at Roche Dure.

The environmental and social impact studies began in early November 2019 and will focus on the long-term environmental management plan, the surface water management plan, flora and fauna study, and the social development programme.

Geotechnical studies are nearing completion which will provide input to the mine pit shell design and mine plan study which was also kicked off in late November 2019.

A full detail technical due diligence study was conducted in November 2019 on the TAZARA railway line and Dar es Salaam port facilities to ensure that these facilities could take on the additional capacity which the Manono project will demand of them.

Ore sorting is also being studied to see if this innovative technology may add some value to the project and thereby reduce the operating costs of the process plant. 

This work will not form the base case of the DFS but will certainly be considered very highly in the list of opportunities to study further post the DFS.

Moreover, a marketing assessment, which considers demand and pricing as well as product specification is almost complete and was carried out by British consulting group, Roskill.

Operational readiness is being reviewed as part of the DFS and several items such as communication and site internet, software and hardware requirements are being studied by a consultant.  This study is 75% complete and is due to be completed in early December 2019.

As part of the formal process to convert the exploration permit into a mining permit (exploitation permit), senior members of AVZ Minerals’ technical team and its consultants have also commenced meeting with local chiefs and dignitaries to appraise them of the company’s intentions to mine the Roche Dure deposit, to obtain their input and to address any concerns they have about future mining activities.

While there is an abundance of good raw water supply for both local consumption and any potential mining operation at Manono, power infrastructure is limited.

Power is currently generated at Manono using diesel generators and a recently commissioned 1.5 MW solar power system. It is AVZ Minerals’ intention to acquire the rights to rehabilitate the MPiana Mwanga hydroelectric power station (which was originally built for the historic tin mine), which will have the ability to supply at least 66 MW of electricity once refurbished to both the Manono town and to the mine.

Rehabilitation of the hydro power plant will be in phases with the first phase being to 22 MW.