[ferro-alloys.com]UK-based exploration and development company Kodal Minerals has signed a memorandum of understanding with Chinese engineering, infrastructure and construction contractor Sinohydro to develop the Bougouni lithium project in southern Mali.

Kodal said Sept.1 that it had chosen the PowerChina subsidiary, as the contractor had already been involved with a number of government-run and private commercial projects in Mali and had also been active in the Bougouni region.

Kodal CEO Bernard Aylward said the two companies been in discussions for a period of time, with Sinohydro's team visiting the Bougouni site.

"We look forward to a strong and productive collaboration between our respective technical teams to maximise the benefit of the MoU, which we see as delivering a third party assessment of our feasibility study, a review of our development schedule and most importantly a review and advancement of the financing opportunities for the Bougouni project," Aylward said.

He added that Sinohydro's experience in Mali and other African countries would help Kodal finalize the design, financing and construction process efficiently and cost effectively.

Under the MoU, Sinohydro will review the Bougouni project's proposed development and provide procurement and civil engineering input for the project's feasibility study, as well as review the project's financing requirements and possibly assist in sourcing financing.

Regarding funding, Kodal said Sinohydro would work with its largest shareholder Suay Chin International and potential end-user Shandong Ruifu Lithium Industry Co, which operates a lithium carbonate and lithium hydroxide production plant in Tai'An, China.

After these reviews, Kodal and Sinohydro will negotiate a mutually acceptable engineering, procurement and construction (EPC) contract, with Sinohydro holding an initial six-month exclusivity period to review and advise on financing for the project and develop an EPC contract proposal.

Kodal has completed a feasibility study for Bougouni and is waiting for its mining license after the application was lodged in January.

Once approved, the project will be fully permitted and be ready to move into development and subsequently, production, with the plan to produce on average 220,000 mt/year of 6% spodumene concentrate over a minimum 8.5-year mine life with an average metallurgical recovery of 71%, based on laboratory metallurgical recoveries of 75%.

Aylward also gave an update on the current political situation and tensions in Mali.

"Current news reports indicate that the situation in Mali is calm and that the government agencies have recommenced office activities. Negotiations between the military leaders and civilian leaders are continuing with the aim of returning to civilian government as quickly as possible," he said.

(S&P Global Platts)

• [Editor:王可]