UK-based mining company Aterian has finalized a joint venture and earn-in agreement with Rio Tinto and Kinunga Mining to explore and develop lithium and associated by-products on its HCK licence in Rwanda.
The project covers a 2,750-hectare area in southern Rwanda and boasts 19 identified pegmatite zones, making it a highly promising site for lithium exploration.
Under the agreement, Rio Tinto will have the option to invest $7.5 million in two stages to acquire a stake of up to 75% in the licence for exploring lithium. The first stage of exploration costs, estimated at $3 million, will be invested over a two-year period and will earn Rio Tinto a 51% interest in the project. The second stage, costing approximately $4.5 million, will be invested over the following three years, granting Rio Tinto an additional 24% stake in the licence.
As part of the deal, Rio Tinto will pay a cash consideration of $300,000 for the two stages of exploration, along with a 2% net smelter return (NSR) over the project, capped at $50 million.
Furthermore, the agreement offers Rio Tinto the option to include two other Aterian projects in Rwanda, subject to approval from the relevant authorities.
Aterian Chairman Charles Bray expressed his enthusiasm about the partnership, calling it a transformative deal that underlines their ability to identify potential world-class deposits, particularly in critical minerals like lithium. He praised the Aterian team for their efforts in identifying strategic mineral assets in Africa and making this significant investment in Rwanda’s lithium potential possible. Bray also expressed gratitude to Rio Tinto for collaborating with them in this venture.
The HCK licence, located in Rwanda, is jointly held by Aterian and HCK Mining, a private, Rwandan-registered entity. Aterian owns a 70% stake in Kinunga Mining, which in turn holds the project licence, while HCK Mining possesses the remaining 30% stake. This strategic partnership is expected to unlock the vast lithium potential in Rwanda and bolster Aterian’s position as a key player in the critical minerals market.
Check out more Mining Industry news!