Falcon Energy Materials (TSXV: FLCN) filed a $100 million arbitration claim against Guinea, alleging that the West African nation illegally expropriated the company’s Lola graphite project.
Abu Dhabi-based Falcon said it filed a request for arbitration with the World Bank’s International Centre for Settlement of Investment Disputes, citing breaches of the bilateral investment treaty between Guinea and the United Arab Emirates, according to a statement issued Monday.
The dispute stems from a May 2025 decree issued by Guinea’s president that revoked more than 50 exploration and mining permits across the country for minerals such as bauxite and gold. This included Falcon’s exploitation licence for Lola, which is located about 1,000 km southeast of Conakry, near the Liberian border.
“While we regret that legal proceedings have become necessary, we are fully prepared to present our claim for compensation in arbitration, encompassing both the loss of the company’s assets in Guinea and the additional damages arising from the actions of the Government of Guinea,” CEO Matthieu Bos said.
With Falcon having raised C$25 million ($18 million) last month via a private placement, “the company has secured full support from its shareholders to pursue this case as well as sufficient funding to cover all legal costs, and we remain confident that shareholders’ interests are protected,” Bos added.
Mining code
Falcon argues the decree violated the country’s 2011 mining code and the terms under which the licence was originally granted in 2019. The company also said it didn’t receive formal notice of the revocation before the decree was issued.
Further complications ensued, including the freezing of bank accounts linked to entities affected by the decree.
“Any positive outcome for the situation, including receiving compensation for the investment in the property or reinstating the permits, provides upside and optionality for the company,” Desjardins Capital Markets mining analyst Amanda Lewis said Monday in a note. Lewis regards Lola as “non-core” to Falcon’s strategy, adding that she doesn’t assign any value to the project in her model.
Flagship asset
As it pursues compensation for the Guinea project, Falcon is continuing to advance plans to create processing capacity. It’s building a pilot plant and putting together an environmental impact assessment for a full-scale graphite facility in Morocco — with first production targeted for the second half of next year.
Lola had been Falcon’s flagship asset and the cornerstone of a broader strategy to build an integrated battery-materials supply chain. The deposit hosts measured and indicated resources of about 54 million tonnes grading 3.98% graphitic carbon for contained mineral of 2.15 million tonnes.
Falcon had advanced the project through exploration and engineering studies. In 2022, it published an updated feasibility study that pegged capital expenditures at $185 million.
In December 2024, Falcon outlined a development plan combining the Guinea mine with a $73 million processing facility in Morocco to produce coated spheronized purified graphite used in lithium-ion battery anodes. A preliminary economic assessment estimated the integrated project could deliver an after-tax net present value of about $1.3 billion and an internal rate of return of 43%.
Key material
Graphite, a critical mineral for the electric-vehicle supply chain, serves as the key material used in lithium-ion battery anodes. Developers such as Falcon have worked to build vertically integrated operations for Western battery manufacturers seeking non-Chinese suppliers.
Formerly known as SRG Mining, Falcon moved from Canada to Abu Dhabi in 2024 after winning approval from shareholders. At the time, it said the move would provide greater strategic flexibility and strengthen legal protections through the UAE’s network of bilateral investment treaties.
Falcon shares rose 2.3% on Monday morning in Toronto, boosting the company’s market value to about C$153 million ($112 million).
