LONDON: Kodal Minerals has signed a Memorandum of Understanding (MoU) with Sinohydro Corporation Limited, a specialist engineering, infrastructure, power developer and construction contractor, to work together to develop the Bougouni Project.
Sinohydro is a subsidiary of PowerChina, a Chinese state-owned enterprise and a Fortune Global 500 Company with a US$67bn turnover, which is a leading international engineering and construction company providing integrated services across a range of renewable energy and infrastructure areas.
Sinohydro has undertaken a number of large and high-profile engineering and construction projects in Mali and continues to be active in large Government infrastructure projects and private commercial developments.
Importantly for the Company’s Bougouni Project, Sinohydro is currently active in the Bougouni region. It has undertaken a site visit to the Bougouni Project with a number of its technical team, looking at the geology, engineering, logistics and corporate aspects of the Bougouni Project, in addition to having access to the feasibility study dataroom, and has provided initial feedback on the high quality of the work undertaken to date, and the development potential.
The focus of the MoU is for Kodal Minerals and Sinohydro to work together to develop the Bougouni Project. The key objectives are:
· Sinohydro will conduct at its own expense a review of the development proposed for the Bougouni Project and provide input in particular on procurement and civil engineering aspects of the feasibility study;
· Sinohydro will review the financing requirements for the Project and, subject to satisfactory review, assist in sourcing financing for the Project. Sinohydro acknowledges the experience of, and will work with, the Company’s largest shareholder, Suay Chin International Pte Ltd, and in turn Shandong Ruifu Lithium Industry Co Ltd, which operates a lithium carbonate and lithium hydroxide production plant in Tai’An, China and is expected to be an end user of the spodumene product produced by the Bougouni Project;
· Following completion of the feasibility review and development plan and demonstration of project financing, Kodal Minerals and Sinohydro will use reasonable endeavours to negotiate a mutually acceptable EPC contract; and
· Kodal Minerals has granted Sinohydro an initial six-month exclusivity period to review and advise on financing for the Bougouni Project and develop an EPC contract proposal.
Bernard Aylward, CEO of Kodal Minerals, commented: “We are very pleased to announce the finalisation of the MoU with Sinohydro and believe it reflects the underlying value of the Bougouni Project. We have had ongoing discussions with Sinohydro for a period of time during which we have been pleased to host their technical team at the Project 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.
“Sinohydro has a strong track record of developing and working on engineering projects in Mali and elsewhere in Africa which gives us great confidence that we have teamed up with a group that will bring many positive benefits to the Bougouni Project and will help Kodal Minerals to finalise the design, financing and construction process efficiently and cost effectively.
“Kodal Minerals notes the continued uncertainty in the political situation in Mali, and as announced by Kodal Minerals on 19 August 2020, continues to review the situation. 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.”
Sinohydro‘s extensive experience in operating in Mali and general civil, power supply, hydrological expertise and infrastructure development will provide strong support for the finalisation of Kodal Mineral’s development plans for the Bougouni Project.
PowerChina’s operational reach is extensive, with the company undertaking operations in 101 countries globally and with 113 countries worldwide hosting branch offices in 2019. PowerChina operates various subsidiary companies including HydroChina, SepCo, SecoIII, Hypec International, SEPC, STECOL and Sinohydro. PowerChina recorded turnover of US$67bn in 2019.
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