Lithium War is for washing and lasting
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MAGALHÃES AFONSO10/12/2017 10:35
Lusorecursos submitted an application for exploration even before the Braga Court decided against New Lithium in a precautionary measure. But Australians continue to claim rights.
The lithium reserves in Portugal are an asset and there are many ongoing projects. Of the 46 applications for exploration and research at the General Directorate of Energy and Geology (DGEG), 30 target lithium as the main mineral.
Among the sites - a total area of 2,500 square kilometers - where there is prospecting, the most mediatic has been Sepeda, in Montalegre, where an important deposit is identified. Sepeda has also been the scene of a dispute between two companies that this week, the end of the deadline for submitting the request for exploration, has known legal developments that will maintain the dispute over the next year.
The dispute between Lusorecursos and Novo Liu, which eventually forced the intervention of the GNR, was brought before the courts after the second lodged an injunction to the first. Earlier this week, the Braga Court rejected the injunction filed by the Australian firm Novo Lithium against the Portuguese company Lusorecursos, of Braga, because of a concession to exploit this deposit.
In the injunction, the Australians claimed to have been granted the position of the prospecting agreement and said that Lusorecursos would lose the concession because it did not have the technical and financial capacity for the subsequent concession of the exploitation of the ore.
Lusorecursos rejected the claim, stating that the contract of prospect was granted and renewed, which was only possible because it had proven capacity. The position was accepted by the court.
Prior to the decision, Lusorecursos submitted a request to the DGEG to extract lithium oxide in the Sepeda area of Carvalhais, Morgade, in Montalegre.
The DGEG will only decide on the exploration request, which the New Lithium also decided to deliver, despite the decision of the Court of Braga, next year.
In a midweek statement, the Australian company says it would submit to DGEG 'its full exploitation plan and the corresponding application for an operating license in order to protect the company in respect of its rights if the operating license submitted by Lusorecursos is refused by the DGEG, due to lack of technical and financial capacity of the same.
The Australians claimed that there was a risk that Lusorecursos would not submit the new exploration request before the deadline - December 7 - which, if it did, would cause irreparable damage. But Lusorecursos proved to the court that in the meantime it had submitted the request to the DGEG. Thus, the court considered that the New Lithium could no longer replace the company of Braga.
Valid contract
At the base of the dispute is the attempt of the New Lithium to obtain the license of exploration, but Lusorecursos is the only entity with whom "the State has a duly valid contract", recognizes the Ministry of Economy.
The current exploration contract, which is owned by Lusorecursos, was signed on December 7, 2012 and ended five years later on Thursday. However, in June of last year, New Lithium - then still Dakota Minerals - announced that it had agreed to purchase Lusorecursos from the rights of this license. But the transfer of rights to Australians never happened, leading to New Lithium to put Lusorecursos in court. Lusorecursos' decision not to recognize the existence and validity of the contract entered into with Dakota Minerals / New Lithium "is also being challenged by Sinergeo, a company that was in the genesis of Lusorecursos and also admits to sue the two partners of the Bracarense firm.
For exploration - the court asked for evidence of financial capacity to move forward - the two entrepreneurs notified the Ministry of Economy of the intention to set up a company, Lusorecursos Sepeda, whose share capital - EUR 1,5 million - would three business enterprises. Accompanying the 'request for allocation of mineral exploration concession following exploration' is a commitment of the two entrepreneurs to increase the company's share capital in the first year of activity to 5 million euros.
The question of project funding had led Lusorecursos in September 2015 to request the temporary suspension of work because of the impacts of the "serious economic crisis". Six months later, it revealed that it had 'excellent prospects' for the entry into the capital of a new partner - Dakota Minerals, which would 'boost and accelerate the planned investment plan'
The New Lithium injunction against Lusorecursos alleged that the Australian company had - due to a contract signed with the Braga companies - legitimacy to ask the State to transfer to itself the contractual position in Sepeda.
But the New Lithium never asked the Ministry of Economy for this transfer, which, according to the Braga Court, even if it wanted to apply for an exploration license, would have "enormous difficulty", since it had never had the administrative authorization.
Although the court decision was unfavorable to him, Novo Liu announced that, in response to this decision of the Braga Court, "it immediately took the necessary measures to protect its rights through a legal strategy to be developed in several phases, while preparing the bringing of the principal action '.
Suspended shares
On Tuesday the shares of New Lithium had been suspended on disallowed, awaiting clarification from the company on the precautionary measure that ended up hit.
The suspension of the trading of shares of New Lithium is nothing new. In May, due to the dispute with Lusorecursos, it had suspended, with two extensions, the trading of the shares in the Australian stock exchange. ASX (Australian stock exchange) believes that voluntary trading suspensions are not uncommon but should be a last resort.
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