‘For evidence of how China has stolen a march on the West in terms of critical minerals production, look no further than AIM-listed Kodal Minerals.’
FOR evidence of how China has stolen a march on the West in terms of critical minerals production, look no further than AIM-listed Kodal Minerals. First production of Kodal’s Bougouni lithium mine in Mali starts this year, which is good going considering the mining licence was only granted in 2021. Kodal’s Bernard Aylward, a veteran developer of mines, says Bougouni will provide a springboard for Kodal to kick the tyres on its gold prospects sprinkled throughout West Africa. First, though, the firm has to deliver on construction of a dense media separation plant at Bougouni that will absorb $65m in investment. Those funds were pumped in by Hainan Group, which also took a 14.51% equity stake in Kodal, exceeding the 11.85% stake of Suay Chin.
The Singapore headquartered trader has deep contacts in China’s chemicals industry, which needs the lithium to drive its thriving electric car industry currently flooding Western markets. After construction of the DMS, Kodal will press on with a flotation plant at Bougouni. An updated feasibility study resulted in a 40% increase in Bougouni’s reserves which already had an impressively short payback period of eight months and a nearly 100% return on invested capital. Shares in Kodal have gained 65% over the past 12 months and the expectation can only be of further gains given the medium-term fundamentals for lithium (despite current price pressure).
We hear Sibanye-Stillwater’s US lithium project might stall on the presence of sensitive buckwheat that could struggle to achieve environmental clearances, while a Donald Trump presidency might unhinge the subsidies allowed to it by President Joe Biden’s Inflation Reduction Act. And the West wonders why the Chinese are so, so far ahead.
LIFE OF BERNARD
A geologist, Aylward earned his stripes in West Africa’s exploration industry, playing a part in the discovery of four deposits in Ghana, as well as a history of successful discoveries in Western Australia. Other postings have seen him dig for metals in Greece and Siberia, locations that couldn’t be more different and underpinning the mining truism that you go where the deposit is. He took Taruga Gold through a listing in Australia and was COO for International Goldfields as well as holding down positions at Croesus Mining and Azumah Resources.