AVZ Minerals has executed a binding memorandum of understanding with the Congolese Government to create a “special economic zone” for the Manono Lithium and tin project in the Tanganyika Province of the Democratic Republic of Congo. A special economic zone has the potential to deliver significant economic stimulus to both AVZ and the local communities around Manono, with tax breaks high on the list.
AVZ Minerals has executed a binding ‘MoU’ with the Congolese Government to create a “special economic zone” to cover the company’s massive Manono Lithium and tin project in the Tanganyika Province of the Democratic Republic of Congo.
A special economic zone has the potential to deliver significant financial benefits for the development and profitability of Manono, including exemptions or reductions in corporate taxation and duties. The agreement was reached between the AVZ management team and the Ministry of Industry in the Democratic Republic of Congo.
The purpose of the MoU is to establish the terms for collaboration and negotiation between the two parties with a view to establishing the development of basic infrastructure in the “Manono Special Economic Zone” in the Tanganyika Province.
The company said that infrastructure for mining operations and the future export of products would be at the core of any developments within the special economic zone.
AVZ’s management team, led by Mr. Balthazar Tshiseke, Mr. Serge Ngandu and Mr. Christian Lukusa, on behalf of its 60% controlled subsidiary Dathcom Mining SA, presented the Manono lithium and tin project to a panel of delegates from the Ministry of Industry on a recent visit to Kinshasa.
The company said that, in essence, the special economic zone allows the company to enjoy exemptions or reductions, either permanently or temporarily, on various direct and indirect taxes, royalties and other duties payable to the DRC.
The MoU currently has a 12-month term and it can be terminated in the event of non-performance by either party. AVZ management will collaborate with government representatives over the next four months to define the geographic area and all essential infrastructure in the zone, including water, hydro power, roads and the Manono leases.
AVZ said that, as the developer of the zone, it would be eligible for additional benefits from the Congolese Government, as opposed to being purely an investor in the zone. AVZ said it plans to install a manager to run the zone under contract on behalf of the joint venture between the Government, a financier and AVZ.
Under the MoU, AVZ said the Ministry of Industry will commit to the granting of all licences in relation to the special economic zone, make all relevant information available to AVZ, engage with AVZ in a public private partnership and support AVZ to develop basic infrastructure in the zone.
AVZ’s Managing Director, Nigel Ferguson, said: “We are extremely excited by this major step forward for the Manono Lithium and Tin Project. The Congolese Government has executed on what they stated they would do in support of the Manono district and they clearly agree with us, in that AVZ’s Manono Lithium and Tin Project can be a major catalyst for the redevelopment and invigoration of the Manono district to its former glory.”
“AVZ is very much onboard with the redevelopment of the province to allow what was once a bustling industrial and mining community to again be allowed to shine through direct investment in infrastructure, job creation and the education of its residents on the back of the Manono Lithium and Tin Project being commissioned.”
At the signing of the Memorandum of Understanding, the Minister for Industry, the Honourable Julien Paluku said that industry must now be a factor of stability and peace with the creation of wealth and jobs. He also said there was an intention to change the perception of and transform the ‘triangle’ into a ‘triangle of industrialisation” that will result in job creation.
AVZ’s deal with the DRC Government represents a giant step forward and a significant de-risking of the in-country risk.
If it remains solid and the partnership grows because of it, the upside of getting and staying close to the DRC Government cannot be over-stated.
Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au
