Tantalex plans to raise funds for DRC lithium, tantalum, tin production

By David Whitehouse
Posted on Friday, 22 July 2022 06:00

Lithium batteries are manufactured in Yichang, Hubei province, China May 28, 2019. REUTERS/Stringer

Canada-headquartered Tantalex Lithium plans to raise funds to bring its assets in the Democratic Republic of Congo (DRC) into operation and continue exploration, CEO Eric Allard tells The Africa Report.

The company aims to raise $15m by early next year, which could be from an off-taker or strategic investor, Allard says. Tantalex is also working to secure bank loans and plans a small equity placement, he adds. Further fundraising would then be needed to build a mine at the largest project, Manono Tailings in south-east DRC, which contains lithium, tantalum and tin.

Drilling continues at Manono Tailings, with a resource estimate due by mid-September and a final investment decision planned for 2023. Production could then start there by late 2024 or early 2025, which would coincide with a forecast peak in lithium demand, Allard says.

Lithium boom

Lithium is a key component in electric vehicles, wind turbines and solar panel batteries. Prices have surged this year as high oil prices accelerate global roll-outs of zero-emission transportation policies.

According to Susan Zou, a senior analyst at Rystad Energy, the battery-grade lithium carbonate price in the domestic Chinese market currently is up by around 832% from the start of last year. Rystad says that the lithium carbonate price in China has room to increase further in the third quarter.

  • Allard says that global demand for lithium is likely to rise by about six times between now and 2030, driven by climate change and electric vehicle adoption.
  • Tantalex is listed in Canada and Frankfurt. This month, the stock started trading on the OTCQB venture market in the US.
  • Executives including Allard hold 14% of its shares, and Swiss metals trader AfriMet Resources is a core shareholder.

Colonial roots

Mining activity at Manono was started by Belgian colonialists in 1913. Poorly maintained Belgian residences can still be seen there, says Allard, who lived for five years in the Republic of Congo and a year in the DRC.

Parts of the road between Manono and Lubumbashi are difficult in the wet season, and some bridges need repairing, Allard says. He hopes to reach an agreement on paying for the repairs with the government, which is a minority partner in the project. It is “obviously in their interests” for the road to be fixed, he argues.

The company has a smaller tin and tantalum project at Lubule, where it has invested $10m. Electronic components such as engine turbines and semiconductors contain tantalum, while tin is used in anti-corrosive plating and coating.

Allard is waiting for Tantalex’s exploration license to be converted into a mining permit. The process is “clearly procedural” and the permit is likely to be “days or weeks away,” he says.

  • Starting production at Lubule would show investors that the company can operate in the region and generate positive cash flow to help fund more exploration, Allard says.
  • The company’s Pegmatite corridor project also has great potential, Allard says. The lithium resource held by AVZ Minerals in the area is “the best lithium resource in the world,” he says.
  • The Tantalex permit covers surface areas, where operating costs will be low, while AVZ has underground rights. The area has “high potential for further discoveries,” Allard concludes.

The bottom line

The world needs the DRC’s lithium resources if a mass shift to electric vehicles is to become reality.

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