Trump challenge lifts the hopes of a great escape for troubled lithium company AVZ

The US will challenge China over an embattled Australian company’s claim to a huge lithium deposit in the Democratic Republic of the Congo.

A member of the M23 movement looks on as Congolese police officers board trucks. Picture: AFP

The Trump administration is poised to insist control of a massive lithium deposit be handed back to an Australian company as it advances its critical minerals interests in the resource-rich Democratic Republic of the Congo.

Any US intervention on behalf of AVZ Minerals – an ASX company once valued at $4.6bn but with a troubled history – over the Manono lithium deposit risks provoking a backlash from China given one of its biggest miners is developing the DRC project.

The Trump administration is eyeing a critical minerals partnership with the African nation that is the source of most of the world’s cobalt, a major copper producer, and blessed with lithium, uranium and other minerals.

DRC President Felix Tshisekedi is seeking US protection as Rwanda-backed M23 rebels overrun parts of the country that host its highly valuable mineral deposits.

AVZ was delisted from the ASX last year while it contested the ownership of the Manono project, touted as potentially bigger than the world-leading Greenbushes mine in Western Australia.

Democratic Republic of the Congo President Felix Tshisekedi and French President Emmanuel Macron in 2024. Picture: AFP

If AVZ regains control of Manono, it is likely to be on-sold to a US entity, based on talks that have played out in Washington in recent days.

Such a deal would represent a great escape for AVZ and boost non-China investment.

The plan, if realised, risks inflaming tensions with China as the US shows a willingness to back Australian companies and muscle in on Beijing’s near stranglehold on critical minerals supply chains.

Chinese mining giant Zijin is targeting first production of lithium from Manono from early in 2026 despite AVZ’s attempts to regain control. AVZ had also worked closely with China’s CATL, the world’s biggest electric vehicle battery manufacturer, which as recently as January provided $20m in funding to the Australian company.

US and DRC officials have discussed the ownership of Manono and AVZ’s claims to the project, according to a source who attended the talks but is not authorised to speak publicly.

The Australian understands both White House officials and the DRC want Manono to end up in US hands via AVZ.

The Trump administration is alert to the advantage Australian companies can offer in its critical minerals quest through their mining know-how and resource assets.

Manono boasts a 842 million tonne resource at 1.61 per cent lithium oxide and is split into two geographically distinct northern and southern deposits. The southern part alone holds a 669 million tonne resource.

Congolese police officers line up for redeployment in February. Picture: AFP

AVZ maintains it has rights to all of Manono even though the DRC has split the licence and Zijin has forged ahead in the north.

It is understood the US may back AVZ being handed back only the southern licence to minimise antagonising China.

The DRC has been fighting M23 rebels and now Rwandan troops, who have gained control of parts of the country. The rebels have pushed deep into mineral-rich territory after capturing the cities of Goma and ­Bukavu.

The Australian understands that the White House will send a special envoy, Massad Boulos, to conduct negotiations in both Kinshasa and Kigali before the end of this month as it looks at ways to resolve the conflict and explore a potential critical minerals agreement.

Mr Boulos is the father-in-law of Mr Trump’s daughter Tiffany and his adviser on Arab and Middle Eastern affairs.

The critical-minerals-in-return-for-regional-security discussions have been compared to demands the Trump administration made on Ukraine.

In the case of the DRC, Mr Tshisekedi is reported to have offered exclusive access to critical minerals and infrastructure in return for assistance and requested a meeting with Mr Trump.

AVZ managing director Nigel Ferguson and commercial manager Ben Cohen have been in Washington and appear to have had success in convincing the State Department and White House officials that the company has been “fighting the good fight” on Manono.

The company refused to comment when contacted by The Australian.

AVZ’s market capitalisation got to $4.6bn in 2022 on high hopes for Manono but fell from grace as it lost control of the massive hard rock deposit.

The company was suspended from trading on the ASX for two years before being delisted in May 2024, trapping equity holders in a stock that was arguably worthless.

A man sifts through the smouldering remains of boxes and materials left behind by looters. Picture: AFP

Its West Perth offices were raided by Federal Police investigating bribery allegations – which AVZ denies – in December.

More than 21,000 shareholders were affected.

Zijin operates copper, gold, lithium and zinc mines around the world, including in Australia. It has invested heavily in developing Manono through a joint venture with the DRC and was granted a full mining licence in the past six months.

Zijin is a part owner of two copper mines in the DRC, including a near 40 per cent stake in the vast Kamoa-Kakula operations alongside Ivanhoe Mines.

AVZ alleges the DRC acted illegally by taking over its permit over the whole of Manono and then awarding the northern portion to a Zijin subsidiary in September 2023.

Any deal brokered by the US to have the southern licence returned is likely to depend on both the DRC and AVZ dropping legal action. The US is also expected to insist any sale of the asset by AVZ comes free of links to CATL.

A CATL subsidiary owns part of AVZ and as far back as 2021 agreed to invest $US240m to build the lithium processing plant in return for 24 per cent of the Manono project.

In January, that deal was revised to allow CATL to acquire 30.5 per cent in return $US259.25m. The revised deal provided AVZ with the $20m to continue fighting legal cases before the International Court of Arbitration and the International Centre for Settlement of Investment Disputes.

Originally published as Trump challenge lifts the hopes of a great escape for troubled lithium company AVZ