One percent of the company seeking approval to buy the Karibib lithium project is owned by Namibians.
Britain-based African Critical Elements (ACE) applied in April to the Namibian Competition Commission (NaCC) to buy shares of the company that owns the Karibib lithium project.
ACE majority shareholder John Wisbey told The Namibian that the company was set up by shareholders who believe in the potential of the project.
“ACE has ownership from a number of its directors and employees from various countries and who all believe in the project and are willing to put their own money at risk. This Namibian ownership at ACE group level is 1% at present but it adds to the 20% local ownership in Namibia,” Wisbey said on Tuesday.
The project is currently 80% owned by Lepidico Canada, a subsidiary of an Australian company that entered liquidation last year.
The remaining 20% is owned by Huni Urib, a Namibian company that sold 80% of the project to Canadian company Desert Lion in 2016.
Since 2022, there have been no operations at the project due to Lepidico’s poor financial position and the low prices of lithium.
Now that demand for lithium is increasing, the project has attracted significant interest, including from Canadian company ILC Critical Minerals.
Wisbey is chairperson and majority shareholder of ILC and was disappointed when the company failed to acquire the Karibib project earlier this year.
“To avoid Lepidico Canada and Lepidico Namibia going into liquidation with consequent shareholder loss of all investment, a number of us decided to do the transaction in a different way. We set up [ACE] and bought Lepidico Canada, and injected working capital for its immediate needs including salaries,” Wisbey said on Tuesday.
He says there is no funding link between the two companies.
“They are independent of each other but have common directors and shareholders,” he says.
Responding to concerns about low levels of capital reported by the company, Wisbey says the company has several capital providers interested in the project after NaCC approval.
“We believe very much in the project and in the country, and we intend to make it work. No one invests this amount of upfront capital without planning of the next stage, at least at a high level,” he says.
The competition watchdog began investigating the proposed sale in April.
Otwathika Investment Holdings, a Namibian company, lodged an objection against the sale in July on the basis of foreign ownership.
“The proposed merger is merely a contrived scheme to ensure foreign control of lithium mining in Namibia. It is obvious that African Critical Elements Ltd is a foreign company wholly owned by foreigners who seek to hold and maintain a total control of the lithium mine,” the objection, prepared by lawyer Richard Metcalfe, says.
Otwathika is currently not involved in the mining industry, but says it is “in the advanced stage of procuring strategic partners in order to enter the industry”.
The investment group alleges that ACE does not have sufficient funding to run the project.
“Approval of the merger will delay the development of the lithium mine whilst African Critical Elements Limited seeks to raise capital. If a Namibian company is given this opportunity the raising of capital will be an easy exercise and foreign dominance and control will be negated,” the objection says.
NaCC investigator Leena Shikongo said last Thursday that the competition watchdog preliminarily intends to approve the sale.
