AVZ Minerals has received $240m in funding from a Chinese investment entity to develop the Manono Lithium and Tin Project in the Democratic Republic of Congo (DRC).

A transaction implementation agreement has been signed in this regard by AVZ Minerals’ wholly owned subsidiary AVZ International and Suzhou CATH Energy Technologies (CATH), a private equity firm jointly owned by Pei Zhenhua and Contemporary Amperex Technology (CATL).

According to the deal, CATH will provide the $240m cash in exchange for an equity interest of 24% in a multi-faceted joint venture to develop the Manono Project.

Moreover, CATH would provide an additional amount to finance its pro-rata portion of funding for the project development.

AVZ Minerals said that the transaction will contribute more than $400m in total. This is subject to final project development costs being verified.

AVZI plans to use the funds mainly to advance the Manono project into the production phase.

Upon completion of the transaction, AVZ’s interest in the project will reduce from 75% to 51% while DRC-owned Cominiere will retain its 25% stake.

AVZ Minerals said that it would assign the existing offtake agreement with Yibin Tianyi to CATH.

Furthermore, CATH would sign a long-term primary lithium sulphide (PLS) offtake of tolling agreement pertaining to the proposed PLS calcining plant. This plant will also be developed in JV with CATH.

The parties are also planning to assess the feasibility of developing a lithium hydroxide facility.

AVZ Minerals managing director Nigel Ferguson said: “We are delighted to enter this deal with someone of the calibre of Mr Pei and CATL, both of whom have the financial capacity, technical expertise and credibility within the lithium conversion and lithium-ion battery industry to complement the world-class Manono project.

“Our shared strategic vision to develop the vast potential of the Manono project and further downstream projects, provide an exciting future for AVZ shareholders.”