Kodal Minerals (AIM: KOD), the West African lithium producer, mineral exploration and development company, announces the commencement of arbitration proceedings regarding a claim by Kodal Mining UK Limited (“KMUK”) for indemnification in respect of the US$15 million payment made to the Government of Mali, as originally announced on 5 November 2024. Kodal has yesterday filed its response to the notice of arbitration received from KMUK.
KMUK is a company owned 51% by Hainan Mining Co. Ltd (“Hainan”) and 49% by Kodal. KMUK is a company established to hold the Bougouni Lithium Project and lithium exploration assets in southern Mali.
Kodal highlights that it has undertaken meetings and had correspondence with representatives of Hainan since the announcement on 5 November 2024 to discuss the issues surrounding the indemnity claim. However, unfortunately these discussions have not resulted in a resolution of the matter.
Kodal has set out in its response its opinion that the US$15 million sum paid to the Malian Government pursuant to the binding Memorandum of Understanding announced on 1 November 2024 in relation to the transfer of the Bougouni Lithium Project mining licence to the mining company Les Mines de Lithium de Bougouni and migration of the project to the Malian 2023 Mining Code is not a liability for tax to be indemnified by Kodal pursuant to the Hainan funding transaction announced on 19 January 2023. The Company is also considering its position in relation to potential associated claims or counterclaims.
Kodal will keep shareholders informed of progress in the arbitration claim as appropriate.