Kodal Minerals may delay Mali’s first lithium

Kodal Minerals (LSE: KOD) has flagged a possible delay in production from its Bougouni lithium project in southern Mali to early 2025 from the originally scheduled fourth quarter this year. 

Heavy rainfall is affecting regional transport routes, but the project funded by China’s Hainan Group remains on target to meet its US$65 million development budget, CEO Bernard Aylward said on Thursday. 

“The open-pit mining is continuing ahead of schedule and a stockpile of ore is being built well in advance of the commissioning of the processing circuit,” Aylward said in a release. “However, the cumulative effect of heavy rainfall coupled with delays in shipping and transport to the site had led to the prudent decision taken by management to advise of a potential  delay.”

Processing plant equipment has arrived at the Abidjan port in Côte d’Ivoire and is being transported to the mine site. Other shipments from China are expected to follow, with the final key item arriving mid-December, the company said. It plans to hire generators to speed up pre-commissioning work, it said. 

Shares in Kodal Minerals fell 7% on Thursday in London to close at 47 pence apiece, valuing the company at £94.2 million ($170.3 million). They’ve traded in a 52-week range of 27 pence to 77 pence. 

Gold producer 

The delay comes as Kodal vies with Australia’s Leo Lithium (ASX: LLL) to develop Mali’s first lithium mine. The country is known for gold mines such as Fekola run by B2Gold (TSX: BTO; NYSE-A: BTG), Sadiola by Allied Gold (TSX: AAUC), Loulo-Gounkoto by Barrick Gold (TSX: ABX; NYSE: GOLD) and Resolute Mining’s (ASX: RSG; LSE: RSG) Syama. 

Companies have been negotiating with Mali’s military government, which has been in power since a 2021 coup. It issued a new mining code last year allowing for increased royalties and up to 35% state ownership of projects.  

Hainan, which invested US$100 million for a 51% interest, is negotiating with Kodal to off-take all the project’s stage one 5.5% to 6% spodumene carbonate product. It would supply the company’s lithium hydroxide plant in China. 

Bougouni’s stage one is to produce 125,ooo tonnes a year of spodumene from the Ngoualana pit. Stage two due after 2026 would produce 230,000 tonnes a year from the Boumou and Sogola Baoulé deposits after $175 million in capital spending funded with stage-one cash flow, the company says. 

Open pits

Kodal is continuing open pit mining at Ngoualana, with pre-stripping of free-dig material essentially complete, the company said. The work is ahead of schedule, and the company said it’s confident that stockpiles of pegmatite ore will be available ahead of commissioning.

The company is also awaiting results from 2,000 metres of drilling at Bougouni, after which it plans to provide a new resource estimate. The project has 31.9 million tonnes in total resources at 1.06% lithium oxide, specific to the Ngoualana and Boumou deposits.

Additionally, Kodal said it remains in discussions with the Malian government regarding the transfer of the Bougouni mining licence to the newly established venture with Hainan, and expects to reach an agreement next month.