On Friday, Premier Africa Mining said it hoped to resolve a lithium supply dispute with China's Canmax Technologies, hoping to avoid a lengthy legal battle that could affect operations, Reuters reported.
On Wednesday, China's Canmax said it was terminating the deal after Premier failed to meet a May 2023 deadline to start delivery of spodumene concentrate due to defects at its processing plant in Zulu, Zimbabwe.
Spodumene concentrate is the raw material for lithium-ion batteries used in electric vehicles.
Premier was supposed to deliver 48,000 tonnes of lithium concentrate a year under an off-take agreement, but issued a force majeure notice to Canmax on June 25, blaming the delay on its recently built plant.
Premier stated that during the period of force majeure, the Company will use its reasonable efforts to work with Canmax to seek remedies. Premier remains committed to a fair solution.
Premier said any dispute relating to the offtake agreement would have to be resolved through arbitration in Singapore, which could take more than 12 months to resolve. Failure to resolve the dispute threatens the future of its business.
In addition to the offtake agreement, Canmax acquired a 13.14 per cent stake in Premier last year, making it the largest single shareholder.
Premier is one of several mining companies focused on Zimbabwe that has recently attracted investment from Chinese battery materials companies seeking lithium resources.
Chinese companies including Zhejiang Huayou Cobalt, China Minerals Resources Group, Chengxin Lithium Group, Asia Pacific Group and Canmax have spent more than $1 billion on acquiring and developing lithium projects in Zimbabwe in the past two years.
