Lithium: Manono scoping study highlights the importance of geographic location on a lithium hard-rock project’s viability

On 9th October, AVZ Minerals released the results of its scoping study for the Manono project in the Democratic Republic of Congo (DRC). This study outlines a project with the capacity to produce an average 440ktpa of 5.8% Li2O spodumene concentrate (or 63ktpa LCE contained in concentrate) over an initial 20-year mine life. Of the hard-rock projects analysed within Roskill’s Lithium Cost Service, Manono ranks as one of the best in terms of average resource grade and size. Furthermore, the stripping ratio outlined within the scoping study of 0.7:1 (waste rock to ore) is the lowest of all the open-pit hard-rock mines and projects analysed within the service. 

The release of this scoping study highlights the quality of the Manono deposit. When it is benchmarked against the current population of lithium hard-rock mines and projects on a mine gate (site operating cost) basis, the project sits comfortably close to the bottom of the cost curve. 

Roskill view:

As Oliver Heathman highlighted this week at Roskill’s LME Week, Breakfast at The Tower event, however, grade and stripping ratio are only two of the three key factors to consider when evaluating lithium hard-rock projects. Using analysis from Roskill’s Cost Modelling for Battery Raw Materials, he explained how the third key factor is geographic location, as transportation costs can quickly erode the overall economics of these projects. This is very much the case with Manono, given the sizable costs associated with moving concentrate some 2,050km from the DRC via truck, barge (across Lake Tanganyika) and rail (across Tanzania) to the port of Dar es Salaam, before presumably being shipped to China for refining. As a result, when these additional costs are considered, the project moves quickly up into the upper quartile of the cost curve.

Roskill’s Lithium Cost Service is available for subscription. The service is updated regularly allowing users to keep track of the latest developments impacting the lithium supply chain. To discuss lithium cost developments with Roskill, contact Oliver Heathman: oliver@roskill.com