Lithium exploration: Abuja-based Chinese companies face court over ‘breach of $10 billion contract, fake license’

Two Chinese companies headquartered in Abuja, Lideal Mines Limited and Wangwang Mining (China) Co. Ltd, along with the latter’s shareholders, Wang Youfeng, Zeng Yusang, Yu Binbin and Zeng Guodong, are facing trial in the Federal High Court in Abuja over alleged breach of contract and false lithium exploration and mining license.

Lideal Mines Limited’s lawyer, Abraham Abisoye, filed the case under ref. FHC/ABJ/CS/1342/2023.

He is seeking general damages of N10 billion for breach of contract over the defendants’ alleged misrepresentations regarding their possession of the exploration and mining license.

Applicant’s claims

According to the lawyer, the defendants informed their client that although they had obtained all necessary permits, they needed machinery to conduct mining activities in an additional approved area including “about 32.3 square kilometers.”

He stated that the defendants allegedly asked the plaintiff for financial assistance to finance the mining project, which ranged from RMB 30 million to RMB 40 million, and the cash paid was classified as investment costs.

“The credit line for investment costs was mutually agreed for an 8-month period of mining operations.

“Surprisingly, after two months of commencement of mining operations, the plaintiff was informed that the purported EXPLORATION LICENSE issued by the Nigerian Mining Cadastre Authority, Abuja was fake and the mining license for 11 square kilometers was claimed to be based on a concession for the search was also false.” he gave up.

The lawyer added that the plaintiff’s representatives asked the defendants to present a mining license in which the plaintiff had already invested significantly by purchasing equipment for this operation; however, they allegedly “refused, failed to keep or neglected to keep their promises pursuant to Art. 9.1 and 9.2 of the Agreement.

The plaintiff’s representative, Cheng Tao Hong, told the court that following the exploration license and the declarations made by the defendants, her company entered into a capital sharing agreement for lithium materials from the mine site, acquiring 30% of the share capital of Wangwang.

The plaintiff is seeking, among other things, N10 billion in general damages.

What happened in court

• At the resumed hearing on Monday, Abisoye, on behalf of the plaintiff, informed Justice Inyang Ekwo that the defendants’ counsel approached his client seeking a settlement but later withdrew from settlement talks.
• He also raised the objection that the defendants had several changes of defense lawyers before the trial began.
• SN Agbu announced his appearance on behalf of Wangwang and another party, but said nothing during the proceedings.
• Abisoye informed the judge that the defendant’s counsel was another new lawyer in the case.
• Abisoye stated that he had two witnesses to support his case.
• The judge responded that while he was “not excluding the parties from the settlement,” he set a hearing date for February 18, 19 and 20, 2025.
• The Federal High Court has jurisdiction to resolve disputes relating to mining and exploration.