PERTH (miningweekly.com) – The direct shipping ore (DSO) opportunity at the Goulamina lithium mine, in Mali, remains present, owner Leo Lithium said on Friday.

Speaking at the last day of Paydirt’s Africa Downunder conference, in Perth, Leo MD Simon Hay told delegates that negotiations with the Mali government were ongoing after the company was ordered to halt its DSO operations earlier this year.

The Mali government in July formed a commission to investigate a number of topics, including DSO, the status of the government’s free carry stake, and the overall status of the progress at Leo’s Goulamina mine, as well as the Morila gold mine, which is held by fellow listed Firefinch, which also held Goulamina prior to its spin-off.

Leo had been targeting the production of 185 000 t of DSO exports until spodumene production at Goulamina starts.

“Originally, the company was planning to make six shipments of DSO, three this year and three next year. The DSO plans were put together with the support of the previous Mines Minister, but a new Mines Minister was appointed about two months ago, and one of his first actions was to stop the DSO,” Hay told delegates.

“The reason for the DSO stoppage was for us to engage with the government, explain the operation a little bit more in detail, provide market commentary, pricing information and product quality information to the government.

“The final decision hasn’t yet been reached on DSO, and there is the opportunity that it will be permitted in the future,” Hay said.

However, Hay pointed out that the economics of Goulamina were not based on the DSO operation, but rather on the enlarged spodumene project. The $225-million Stage 1 project will produce 506 000 t of spodumene concentrate a year, increasing to 880 000 t/y in Stage 2, for a further investment of $70-million.

“One of the key reasons that we wanted to push ahead with the DSO was to demonstrate the logistics of getting product from mine all the way through to the port, which is 1 000 km away. So, if it's not permitted, that's fine. We'll certainly comply with government directions around that.”