Leo Lithium, an Australia-listed mining company, experienced a sharp decline in its shares, dropping by 50% on Monday. The decline came after the announcement that the government of Mali has suspended the export operations of lithium ore from Leo Lithium’s Goulamina mine.
In response to this development, Leo Lithium has provided information to the government regarding its ore-export operations. However, as of now, the company has not received a formal response. Consequently, Leo Lithium has decided to withdraw its guidance on direct shipped ore production and sales for 2023 and 2024.
Despite these challenges, Leo Lithium confirmed that its joint venture construction and mining plan at Goulamina with Ganfeng, China’s largest lithium producer, will continue as planned. Simon Hay, the managing director and CEO of Leo Lithium, expressed confidence in the project’s progression, highlighting the ongoing support from Ganfeng through their cooperation agreement and subsequent equity investment in the asset.
Leo Lithium further revealed that Mali recently implemented a new mining code, allowing the government to increase its stake in resource projects to 20%. As a result, the country’s shares in the Goulamina project will double, representing a significant shift in ownership.
Apart from this, Leo Lithium has successfully sold 5% of the Goulamina joint venture to Ganfeng for a substantial amount of $137 million. With this transaction, the Chinese firm now holds a majority stake of 55% in the asset.