ASX-listed Leo Lithium has secured conditional approval from the Mali government to sell its remaining 40% stake in Mali Lithium BV (MLBV) to China’s Ganfeng.
This transaction marks a significant step in Leo Lithium’s exit from the Goulamina lithium project.
The Mines Minister has given conditional approval, stipulating the submission of transaction documents and the payment of capital gains tax (CGT).
Leo Lithium has already paid $7.6 million in CGT for a 5% sale finalized on May 6. Any additional CGT on the 40% sale will be settled in due course.
Last month, Leo Lithium announced its agreement to sell its remaining interest in MLBV after failing to reach an agreement with the government on issues related to the project.
Commenting on the government approval, Leo Lithium Managing Director Simon Hay described it as a positive step in the company’s planned exit from the project.
“While our preferred outcome would have been for Leo to remain involved in Goulamina, we believe that in the absence of a viable agreement with the Mali government, this course of action is in the best interest of all stakeholders,” he said.
Goulamina is one of the largest lithium developments globally, with Stage 1 spodumene concentrate production estimated at 506,000 tons per year, increasing to a peak of 880,000 tons per year in Stage 2. The project is expected to have a minimum mine life of 23 years, producing 15.6 million tonnes of spodumene concentrate over that period.
Ganfeng will pay Leo Lithium $342.7 million for the remaining stake in Goulamina. As Ganfeng moves towards full ownership of MLBV, the joint venture partners have agreed that Ganfeng will assume management responsibilities for the project this month, prior to the sale’s completion.
As Ganfeng is still building its operational team, it has also been agreed that Leo Lithium will provide management services to the project under a services agreement for up to six months, ending no later than November 13.
