Kodal ships first lithium from Mali to China

Kodal Minerals (LSE: KOD) says it has completed its first shipment of lithium spodumene concentrates produced at its Bougouni mine in southern Mali to its offtake partner in China.

A bulk cargo vessel was loaded with 28,950 tonnes of lithium over the weekend and departed for the destination port in China’s Hainan province, the lithium miner said in a release on Monday.

In late October, Kodal dispatched about 30,000 tonnes of spodumene concentrates to a stockpile facility at the Port of San Pedro in Côte d’Ivoire in preparation for shipment. The full 45,000-tonne stockpile that Bougouni has produced at its processing plant will be gradually moved to the San Pedro port, the company has said.

Good timing

Canaccord Genuity sees the timing of the shipment as a positive development for the company, despite the political unrest in Mali. “Kodal is now generating revenue at a time when lithium prices are showing strong signs of recovery,” analyst Alex Bedwany said in a note on Monday.

“The Bougouni project has produced 45,000 tonnes of concentrate, implying that there is a further 16,000 tonnes to be exported in the near-term. This is tracking well against our H2 (March) revenue estimate of $65 million,” he added.

First revenue

The sale price of the concentrates will reflect “the significant improvement in the lithium pricing environment” in recent weeks, Kodal CEO said in a release.

“The final sale price for the lithium spodumene product will be adjusted to account for the actual grade and quality of product delivered and deducting the cost of sea freight,” he said, adding that the company expects the price to exceed US$930 per dry metric tonne.

After loading the first shipment, LMLB, Kodal’s Malian subsidiary, will submit an invoice to its Chinese offtake partner Hainan Mining for the initial 95% of the cargo value. The company expects the payment to total $24 million, which would be the first revenue generated by LMLB.

Mali’s new lithium mine

In February, Bougouni began producing spodumene concentrates from its dense media separation facility using material sourced from the Ngoualana deposit, becoming the second lithium mine in the country.

Stage 1, during which a conventional circuit will be used to maximize spodumene recovery from Ngoualana, is expected to deliver over 125,000 tonnes per annum of spodumene concentrate production. Stage 2 will feature a flotation plant to process material from the Boumou and Sogola-Baoulé deposits. Together, the deposits have a resource of 31.9 million tonnes grading 1.06% lithium oxide.

LMLB is the operator of the Bougouni mine and is held 65% by Kodal Mining UK, a joint venture between Kodal (49%) and Hainan (51%), and 35% by the Malian state.