Lepidico Chemicals Namibia (LCN) has denied claims that it unlawfully diverted funds from the Karibib Lithium Project or that revenues generated from the project “did not reach Namibia”, saying the allegations are false, unsubstantiated and incorrectly presented as fact.
Responding through its lawyers, Lepidico Chemicals Namibia said the original US$4.5 million customer deposit referenced in the dispute was received by a non-Namibian group entity in line with established group arrangements, after which intercompany funding was advanced into Namibia.
LCN further stated that the first shipment’s revenues were received into its Namibian bank account, contradicting assertions that the proceeds bypassed the country.
Allegations of unlawful diversion, misappropriation, tax evasion, manipulated pricing and concealment from authorities, the company said, are unsupported by evidence or any adjudicated finding.
LCN’s response follows the publication by The Extractor Magazine on 28 November of claims made by Huni-Urib, the 20 per cent Namibian shareholder in the Karibib Lithium Project.
In that article, Huni-Urib alleged that Lepidico diverted millions of dollars meant for Namibia by sustaining and benefiting from offshore revenue structures originally established by Desert Lion Energy and later maintained after Lepidico’s 2019 acquisition of the project.
The Karibib Lithium Project is held under Mining Licence 204, which was awarded in 2018.
Under Namibia’s local participation requirements, Desert Lion Energy was required to include a Namibian partner, leading Huni-Urib to acquire a 20 per cent equity stake in Lepidico Chemicals Namibia, the licence holder.
Huni-Urib says its role extended beyond shareholding to include local facilitation, land access, community engagement and regulatory support.
The ownership structure was disclosed in regulatory and financing submissions, including filings to the US International Development Finance Corporation.
At the centre of the dispute is a 2017 offtake agreement between Desert Lion and Jiangxi Jinhui Lithium. Huni-Urib alleges that Desert Lion received a US$4.558 million customer deposit and exported 30,321 tonnes of lithium-bearing ore in April 2018, generating a gross invoice value of about US$4.144 million.
After deductions, the net realised revenue was substantially lower.
Huni-Urib claims that none of the revenue passed through the Namibian licence holder and was instead routed through an offshore Mauritian entity, a structure it says Lepidico later inherited and maintained.
Huni-Urib further alleges that Lepidico transferred the deposit to Canada and, in November 2022, recognised the full amount as revenue under Canadian law, rather than delivering the remaining two contracted shipments. The non-delivery dispute is currently before the Singapore International Arbitration Centre, where Jiangxi Jinhui Lithium is seeking repayment of the deposit.
Huni-Urib argues that while arbitration will determine repayment, Namibia has already suffered losses in royalties, corporate tax and dividends because revenues did not flow through the Namibian entity.
According to Huni-Urib, Namibia lost royalty and corporate tax revenue from the initial shipment, and it has not received dividends linked to its 20 per cent shareholding, as no dividends were declared.
Huni-Urib has also raised concerns about pricing under the offtake agreement, arguing that the reduction from gross to net realised prices points to undervaluation and potential transfer-pricing practices.
Lepidico disputes these claims, saying conclusions drawn from gross-to-net differences ignore contractual terms, cost deductions and quality adjustments.
Tensions escalated in December 2024 when Lepidico placed the Namibian project under “management”, effectively suspending operations.
Huni-Urib views this as a breach of licence obligations under ML 204 and says it froze the approved work programme while shifting decision-making offshore.
Lepidico has not accepted that this constituted a regulatory breach.
By October 2025, the dispute had expanded into a regulatory confrontation.
Huni-Urib submitted a series of complaints to the Prime Minister, the Minister of Industries, Mines and Energy, the Mining Commissioner, NAMRA, the Competition Commission, BIPA and the Anti-Corruption Commission, seeking regulatory intervention, including the suspension of ML 204.
It also objected to a proposed offshore transaction involving Lepidico’s controlling interest, arguing that it was pursued without consultation or required regulatory approval.
Lepidico has rejected allegations of misconduct and says no dividends were declared because there were no distributable profits, that no quantified liabilities to Namibia have been adjudicated, and that lawful offshore transactions are not improper merely because they occur outside Namibia.
The company has indicated it is willing to provide documentation, including bank confirmations, governance records and accounting approvals, to clarify the flow of funds and the treatment of revenues.
The dispute remains unresolved, with parallel arbitration proceedings ongoing and regulatory authorities now seized with competing claims.
