ASX-listed Leo Lithium has received conditional approval from the Mali government for the sale of its remaining 40% stake in Mali Lithium BV (MLBV) to China’s Ganfeng, a critical step in the company’s exit from the Goulamina lithium project.

The Mines Minister has conditionally approved the transaction, requiring the submission of transaction documents and payment of capital gains tax (CGT). Leo has already paid $7.6-million for CGT on a 5% sale finalised on May 6. Any additional CGT on the 40% sale will be paid in due course.

Leo announced last month that it had agreed to sell its remaining interest in MLBV, having failed to reach an agreement with the government over issues relating to the project.

Commenting on the government approval, Leo MD Simon Hay said that it was a positive step in the process for the company’s eventual exit from the project.

“While our preferred outcome would have been for Leo to remain involved in Goulamina, we believe in the absence of a viable agreement with the Mali government, this course of action is in the best interest of all stakeholders,” he said.

Goulamina is one of the biggest lithium developments globally. Stage 1 spodumene concentrate production is estimated at 506 000 t/y, increasing to a peak of 880 000 t/y in Stage 2.

The project is expected to have a minimum mine life of 23 years, producing 15.6-million tonnes of spodumene concentrate over that period.

The Chinese group will pay Leo $342.7-million for the remaining stake in Goulamina.

With Ganfeng eventually moving to full ownership of MLBV, the joint venture partners decided Ganfeng would assume management responsibilities of the project this month, prior to the completion of the sale. As Ganfeng is still building its operational team, the partners also agreed that Ganfeng would engage Leo under a services agreement to provide management services to the group for up to six months, ending on November 13, at the latest.