Mineral exploration and development company Kodal Minerals has announced that Kodal Mining UK (KMUK)—a joint venture owned 51% by Hainan Group and 49% by Kodal—has entered into a binding memorandum of understanding (MoU) with the Malian government to transfer the Bougouni Lithium Project mining license.
This license will be moved from Future Minerals to a newly established, Mali-registered mining entity, Les Mines de Lithium de Bougouni SA (LMLB).
The Bougouni Lithium Project, located in southern Mali, is supported by a $117.5 million investment from Hainan Group, provided in November 2023.
This includes a $100 million investment into KMUK, which will manage the project through Future Minerals and LMLB as subsidiaries.
Under the terms of the MoU, the mining license will operate under Mali’s 2023 Mining Code. The agreement grants a 35% equity stake in LMLB to the Malian government and national investors, with KMUK retaining the remaining 65%.
The mining license is initially valid for ten years and can be renewed according to the applicable mining code at the time of renewal.
Key terms of the MoU include customs and duties exemptions during the project’s construction phase and guaranteed issuance of necessary permits, including export permits for spodumene.
KMUK has agreed to make a $15 million payment to the Malian State, with $7.5 million payable upon signing the MoU and the remaining amount due by March 31, 2025. Upon completion, the transfer will comply fully with Mali’s legal requirements.
“The MoU for the Bougouni mining license transfer is the final legal step as we advance construction, with production targeted for the first quarter of 2025,” stated Kodal Minerals CEO Bernard Aylward on November 1.
He emphasized that the transfer to LMLB strengthens the project’s position and reaffirms the Malian government’s support.
Aylward highlighted that Kodal’s strong partnership with the Malian government facilitated the accelerated discussions that led to this significant MoU.
In 2022, Mali’s government launched an audit of its mining sector, which included a review of existing mining conventions.
Following this, Mali introduced a new mining code in August 2023. The government then formed a commission, which worked with stakeholders to negotiate code-specific elements, culminating in an Implementation Decree in July 2023 to clarify the economic framework.
KMUK has completed discussions with the commission to confirm the Bougouni mining license transfer and finalize the Hainan transaction terms supporting the project.
The MoU ensures the project will operate under the 2023 Mining Code and provides tax and customs exemptions for construction, including temporary admission of vehicles and machinery, duty exemptions for tools, machine oils, petroleum products, spare parts, and equipment integrated into the project.
The Malian government and national investors will obtain a 35% stake in LMLB through new shares, per the 2023 Mining Code.
This interest includes a 10% free stake initially allocated to the state, with the additional 25% acquired for an estimated $4.3 million. The MoU protects the state’s stake from dilution below 35% in any future capital increases.
Further terms establish a shareholder agreement, ensuring that the LMLB board will include at least four state-appointed directors, two of whom will be independent.
The MoU also formalizes the terms of the Hainan transaction, including KMUK’s $15 million payment to the Malian State, with specified deadlines for each installment.
