The AVZ Minerals Ltd (ASX: AVZ) share price has started the week in a disappointing fashion.
In afternoon trade, the lithium-focused mineral exploration company’s shares are down 11% to 15.5 cents.
Why is the AVZ Minerals share price sinking today?
Today’s decline appears to have been driven by broad weakness in the lithium sector, which has offset the release of a positive announcement.
For example, the AVZ Minerals share price isn’t the only lithium share that is falling reasonably heavily today.
The Galaxy Resources Limited (ASX: GXY) share price is currently down 3%, the Orocobre Limited (ASX: ORE) share price is down 2.5%, and the Vulcan Energy Resources Ltd (ASX: VUL) share price is down 5%.
This is despite lithium prices performing strongly last week due to robust demand for the battery-making ingredient.
As most of these lithium shares have recorded strong gains recently, profit taking could be weighing on them today.
What did AVZ Minerals announce?
This morning AVZ Minerals announced that the Manono Special Economic Zone (MSEZ) decision is expected by the end of May 2021.
The company said: “AVZ is currently updating its MSEZ technical, development, environmental and financial documentation with additional information, as requested by the DRC Government. These documents will be submitted shortly with a decision on the granting of the MSEZ expected by the end of May 2021.”
AVZ Minerals Managing Director, Nigel Ferguson, also spoke about current market conditions, noting that these are supportive for the development of its Manono project.
He said: “Buoyant market conditions continue with both spodumene concentrate and lithium chemical prices strengthening on the back of rising electric vehicle demand, just as international Government policies advance the reduction of carbon emissions whilst securing strategic supply chains that feed domestic EV industries across the globe.”
“Both market and geopolitical factors have fuelled a steep increase in the SC6 price since the start of 2021, with reported prices in China up 56% . With expectations that structural supply deficits will remain and as the uptake of EV’s continues to increase around the globe, the current upward price trends for both spodumene concentrate and lithium chemical products are expected to continue,” he added.
But as positive as this is, it hasn’t been enough to stop the AVZ Minerals share price from tumbling lower today.