Aim-listed Kodal Minerals has signed a memorandum of understanding (MoU) with engineering and construction contractor company Sinohydro to jointly develop the Bougouni lithium project, in Mali.

Sinohydro is a subsidiary of Chinese State-owned PowerChina, which is a leading engineering and construction company globally.

Sinohydro has undertaken a number of large and high-profile engineering and construction projects in Mali and continues to be active in large government-funded infrastructure projects, as well as private commercial developments. 

Its representatives have undertaken a site visit to the Bougouni project, with a number of its technical team personnel looking at the geology, engineering, logistics and corporate aspects of the project, in addition to having access to the feasibility study data room.

Sinohydro has provided initial feedback on the high quality of the work undertaken to date and the development potential, says Kodal.

The key objectives established by the MoU include that 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; and review the financing requirements for the project and, subject to a satisfactory review, assist in sourcing financing for the project.

Sinohydro will work with Kodal’s largest shareholder Suay Chin International and, in turn, with Shandong Ruifu Lithium Industry, which operates a lithium carbonate and lithium hydroxide production plant in Tai'An, China, and which is expected to be an end-user of the spodumene to be produced at the Bougouni project.

Following completion of the feasibility review and development plan and demonstration of project financing, Kodal and Sinohydro will use reasonable endeavours to negotiate a mutually acceptable engineering, procurement and construction (EPC) contract.

Kodal 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.

Kodal CEO Bernard Aylward says the company looks forward to a strong and productive collaboration between the respective technical teams to maximise the benefit of the MoU, which Kodal sees as delivering a third party assessment of its feasibility study, a review of its development schedule and, most importantly, a review and advancement of the financing opportunities for the project.

"Sinohydro has a strong 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 to finalise the design, financing and construction process efficiently and cost effectively,” he adds.

Some of Sinohydro’s other developments include the construction of a new passenger terminal building and associated infrastructures at Bamako-Senou International Airport, which was completed in December 2018, on behalf of the Ministry of Transport of Mali. 

Sinohydro is also the ongoing EPC contractor for the development at Gouina Hydropower Station in Mali of 140 MW – including building a concrete gravity dam, installing a power transmission line of 225 kV, constructing a 16 km access road, and installing the water diversion and power generation system on behalf of Senegal River Basin Development Authority, with the project due for completion in the second quarter next year. 

Following the approval of Kodal’s environmental and social impact assessment in November 2019 and receipt of an environmental permit for the Bougouni project, the company completed a feasibility study and submitted a mining licence application in January this year. 

Once a mining licence is granted, Kodal can swiftly move to development of the project.