A forgotten offtake debt from Namibia’s first lithium producer, Desert Lion Energy, has resurfaced to haunt the proposed sale of Lepidico’s Karibib Lithium, Rubidium and Caesium Project to Canada’s International Lithium Corporation (ILC).
What began as a promising foray into battery minerals in 2017 now risks derailing a 2025 deal that could reshape the region’s critical-minerals map.
Desert Lion Energy was founded in 2017 by Canadian entrepreneur Tim Johnston with the ambition of turning historical lithium-bearing mines near Karibib into Namibia’s first modern lithium operation.
The project area, centred around the old Rubicon and Helikon mines, had been intermittently worked since the 1950s for petalite, a lithium-rich mineral once used in ceramics.
By 2017, global lithium demand was soaring, and Desert Lion sought to fast-track production by exploiting existing stockpiles of lithium mica and petalite rather than waiting for new mine development. The company was listed on the TSX Venture Exchange in 2018, positioning itself as Africa’s first lithium concentrate exporter.
Its operational model was simple: process stockpiled material at the old Rubicon site, truck it to Walvis Bay, and export it to China for conversion into lithium carbonate.
To fund this plan, Desert Lion entered into an offtake agreement in November 2017 with Jiangxi Jinhui Lithium Co., Ltd, a Chinese lithium processor seeking reliable feedstock for its downstream battery materials operations.
The offtake agreement covered up to 160,000 tonnes of stockpiled lithium concentrate, with Jinhui paying a US$4.5 million deposit and receiving an initial 30,000-tonne shipment in March 2018.
The contract was valid until November 2022 and envisaged continuous offtake as Desert Lion ramped up operations.
However, by September 2018, operations were halted due to logistical, funding, and grade-control issues. Desert Lion suspended mining and stockpile processing before fulfilling its full delivery obligations. When Lepidico Ltd of Australia acquired Desert Lion in 2019 for about A$22.9 million, it inherited not only the Karibib assets but also the liabilities attached to that offtake agreement.
Lepidico enters the scene
Lepidico Ltd, an Australian-listed company pioneering lithium extraction from lepidolite and other non-traditional minerals, had been tracking Desert Lion’s progress closely. In May 2019, Lepidico acquired 100 per cent of Desert Lion Energy in an all-share transaction valued at approximately A$22.9 million.
The acquisition gave Lepidico access to the Karibib Project, which included Mining Licences 134 and 204 (Rubicon and Helikon) and the adjacent EPL 5439. Lepidico saw Karibib as a feedstock source for its proprietary L-Max and LOH-Max hydrometallurgical technologies, designed to produce battery-grade lithium hydroxide from mica ores while also recovering by-products such as rubidium and caesium.
Under Lepidico, the project was systematically advanced. The company invested more than A$12 million in drilling, resource delineation, environmental work, and a definitive feasibility study completed in 2020. The study confirmed Karibib’s potential to supply lithium-mica concentrate to a proposed chemical conversion plant in Abu Dhabi.
However, Lepidico also inherited Desert Lion’s liabilities, including the unresolved offtake dispute with Jinhui. The offtake contract had not been formally closed or settled at the time of the takeover. Jinhui’s deposit remained in dispute, and Desert Lion’s suspension of shipments was later cited as a breach of contract.
From dispute to arbitration
In 2023, after years of failed settlement attempts, Jiangxi Jinhui Lithium Co. Ltd filed a formal claim at the Singapore International Arbitration Centre (SIAC) seeking repayment of its US$4.563 million deposit and additional costs. Lepidico, as Desert Lion’s successor, disputes the claim, arguing that Desert Lion had fulfilled its obligations within the agreed parameters and that Jinhui had no right to a refund.
The arbitration proceedings, scheduled to conclude in late 2025, have now become central to the fate of Lepidico’s Namibian assets. Should the tribunal rule against Lepidico, the Karibib Project could carry a contingent liability substantial enough to deter new ownership or financing.
The ILC acquisition and the debt clause
On 28 October 2025, International Lithium Corporation confirmed that Lepidico Mauritius, which owns 80 per cent of Lepidico Chemicals Namibia, had satisfied all conditions for a C$510,000 secured loan. This paved the way for ILC to exercise its option to acquire 100 per cent of Lepidico Mauritius for C$975,000, less loan repayment and interest.
However, ILC warned that the deal would not proceed if Lepidico Mauritius or its subsidiaries carried any outstanding debt to the Australian parent, Lepidico Ltd, which is now in liquidation. More importantly, the transaction could collapse if the Singapore arbitration produces an unfavourable outcome, effectively linking the acquisition to the resolution of the Desert Lion dispute.
Why it matters
The Karibib Project represents one of Africa’s most promising rubidium deposits, with lithium and caesium as strategic co-products. If the acquisition is completed, ILC would immediately gain the continent’s largest disclosed rubidium resource and one of the most significant caesium holdings outside China, complementing its Raleigh Lake Project in Ontario, Canada.
ILC chairman John Wisbey said the acquisition aligns with the company’s strategy to expand into high-value critical minerals. “This transaction represents a significant advancement for ILC globally, particularly in Southern Africa,” he said. “With this single deal, we would leapfrog several years of development work.”
But beneath the optimism lies a reminder of how early-stage mining ventures can falter under financial and operational strain. Desert Lion’s push to pioneer Namibia’s lithium industry made headlines in 2018. Still, the rush to monetise stockpiles without a solid production base left unresolved debts that continue to echo seven years later.
The long shadow of Desert Lion
The Singapore arbitration and any subsequent enforcement could determine whether Lepidico’s Namibian assets are clean enough for transfer or remain entangled in the liabilities of their predecessor.
For Lepidico, the issue is existential: if the arbitration goes against it, creditors from both Australia and China could assert claims that outlast the company’s liquidation process. For ILC, the concern is reputational and financial—no investor wants to acquire a project clouded by a multi-million-dollar legacy dispute.
As the tribunal prepares to rule, the outcome will decide not only the fate of the Karibib Project but also the credibility of Namibia’s early lithium ventures. Desert Lion Energy’s name has long since disappeared from company registers, but its debts may yet dictate the next chapter of Namibia’s critical minerals story
