We deem this a reasonable request as during our due diligence exercise, we were advised that no law in Namibia prevents exporting of lithium ore, and it was on that basis that we aligned our affairs and decided to invest with the hope that we would be able to sustain our business operations in that manner while undertaking the necessary beneficiation exercise such as setting up a lithium beneficiation plant. We, however, reiterate that although we know of no law preventing the shipping of lithium ore, shipping of lithium is not our permanent business strategy, and we only want to do it for three years, which is the reasonable period we require to set up a lithium processing plant in Namibia. – Xinfeng
One of the cases that has been dragging on for nearly two years is between mines minister Tom Alweendo and Xinfeng Investments over the lithium mining licence 243.
Xinfeng has already won its case against Alweendo’s decision to cancel its mining licence but is expected to answer to allegations of fraud in its application for the mining licence.
The parties are expected to file a joint case management report and a proposed draft court order on or before 11 April 2024.
BACKGROUND
Xinfeng acquired EPL 7228 in March 2021 and was registered as a company on 10 August 2021 in Namibia.
EPL 7228 covers a 27,879.44 ha area 45km west-northwest of Omaruru town.
The shareholders are Yuqing Liu (85%), Yiming Xie (10%), and Likulano January Sauiyele (5%).
The company is a Tangshan Xinfeng Lithium Industry Co subsidiary. Tangshan is a part of the Xinfeng Group, which has a spodumene processing plant in China.
Xinfeng submitted its licence application on 17 December 2021.
The company asked for 25 years to explore the base and rare materials, particularly lithium in the form of spodumene, petalite, lepidolite, and amblygonite.
The production capacity was 340 000 tpa over the first three years and 400k tpa from the fourth year.
The company said it expected to spend N$2,137,200 during the exploration phase from April 2023 to October 2024. The mining phase was supposed to start in October 2024, with ore treatment set for November 2024.
Xinfeng later said it inadvertently printed and submitted an incorrect technical report, and it submitted an updated version on 15 June April 2022.
However, Xinfeng later revised its mining programme, setting September 2022 as the start of the mine development, the mining start date as September 2022 and ore treatment as December 2025.
The company also indicated the production capacity would be 1. 2 million tpa over the first three years and 1.8 million tpa from year four.
Xinfeng also sought permission to export large quantities of unprocessed lithium ore instead of lithium concentrate, as stated in the original programme.
According to Xinfeng, it needed the ore for studies aimed at engineering and refining technology for the beneficiation plant and to fund the desalination plant, the beneficiation plant, and the mine’s operations for the next three years.
The mines ministry granted Xinfeng mining licence 243 on 23 August 2022.
Throughout September 2022, Xinfeng exported over 60,000 tonnes of unprocessed lithium ore valued at N$50 million.
Alweendo ordered Xinfeng to stop exporting raw lithium ore on 20 October 2022, pending the finalisation of an investigation as to how the company had obtained an export licence.
The minister also said Xinfeng had contravened some sections of the licence.
On 27 October, Xinfeng submitted a ‘Financial and Economic Implications for Lithium Mineral Processing on the Kohero Mine’ to Alweendo, seeking permission to export 120 000 tons of unprocessed lithium ore with an estimated value of N$100 million every month or 1.44 million valued at N$1,2 billion annually. The company said it needed to export 4,3 million tonnes within three years to raise N$4,3 billion.
LICENCE REVOCATION
On 25 April 2023, Alweendo told Xinfeng he was revoking the decision to grant licence 243 regarding EPL area 7228.
Alweendo accused Xinfeng of deliberately including misleading, untrue and incorrect information. He also accused Xinfeng of copying Desert Lion Energy’s exploration works, mineral resource estimates, and mining methods.
The minister finally revoked the licence on 6 September 2022.
In May 2023, Xinfeng launched an urgent application, asking the court to order that the minister, the mining commissioner in the Ministry of Mines and Energy and the environmental commissioner in the Ministry of Environment, Forestry and Tourism not to implement the minister’s decision to revoke the company’s mining licence.
Xinfeng also argued that Alweendo had no legal basis to revoke the licence.
High Court judge Ramon Maasdorp ruled that Alweendo had no right to revoke the licence but that he should have approached a competent court of law to review the decision and set it aside.
Maasdorp, however, said Xinfeng would still have to answer for its conduct in the main trial.
Xinfeng asked the court to prevent Alweendo from implementing his decision to revoke their mining licence, but Alweendo filed a counter-suit, asking the court to declare his decision to grant the licence as a nullity.
*Photo Credit: Global Witness
