Special Report: A refurbished hydro-electric power station – 85km from AVZ Minerals’ proposed Manono lithium and tin project – represents huge operational cost savings for this world class development.

AVZ Minerals (ASX:AVZ) subsidiary AVZ Power has signed a crucial memorandum of understanding (MoU) with the Democratic Republic of Congo government to explore refurbishment of the Mpiana Mwanga hydro-electric power station and associated power grids.

Cheap hydro-electric power represents huge upside for the globally significant Manono project.

Manono is already a potentially lucrative, low-opex operation centred on a historical tin mine about 500km north of the city Lubumbashi in the south of the DRC.

Mpiana-Mwanga — a much cheaper (and greener) option than diesel-powered generation as is currently estimated in scoping studies — could bring those operational costs down even further.

How much? An estimated 3c to 4c per kilowatt-hour (kWh), as opposed to using diesel powered generators at an estimated 42c per kWh.

This power station was originally built in 1933 to service the historic tin mine at Manono but closed in 1982 when operations ceased.

Based on a positive outcome of the feasibility studies into re-commissioning the power station, AVZ wants to acquire a long-term, exclusive lease to rehabilitate Mpiana-Mwanga.

Up to ~54 megawatts (MW) of electricity can be generated from the rehabilitated power station – enough to power both the Manono town site and AVZ’s nearby mining camp and associated infrastructure.

That includes any future expansion of the mine site, like a 25,000-tonne-per-year hydroxide plant.

AVZ has been working towards securing this opportunity for several months, managing director Nigel Ferguson says. The rehabilitation of the Mpiana-Mwanga power station is a major step forward for the company.

“Controlling the refurbishment of the hydro power plant allows the company to develop the hydro plant in phases that align with AVZ’s mine expansion program, with the first phase delivering approximately 18MW of electricity from two turbines,” Ferguson says.

“We can then expand the existing power station, which has capacity for six turbines, to deliver additional electricity for our expanded DMS plus flotation operation and finally, our third expansion phase – establishing a hydroxide plant – with a combined requirement of approximately 54MW of electricity.”


Hitting the ground running in 2020

AVZ is well on track to deliver the definitive feasibility study (DFS) for its tier 1 Manono lithium and tin project in the first quarter of 2020.

“The company remains on track to deliver its definitive feasibility study in Q1 2020. We continue to investigate our export routes and are looking to secure DRC government benefits by way of supportive tax incentives and exemptions early in 2020,” managing director Nigel Ferguson said late last year.

“Furthermore, we are in ongoing discussions with a number of interested parties around longer term partnerships involving offtake and debt financing. It is expected that the completion of the DFS will solidify these discussions into meaningful financing of the project.”


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This story was developed in collaboration with AVZ Minerals, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.