Leo Lithium share price remains frozen. Here's why

Leo Lithium shares are staying frozen for at least another week.

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The Leo Lithium Ltd (ASX: LLL) share price won't be returning to trade as expected on Thursday.

This morning, the lithium developer has asked for its suspension to be extended.

Its request reveals that its discussions with the military-led Malian government are incomplete and that it needs more time. The company said:

The Company requests an extension to its voluntary suspension pending an announcement in relation to ongoing incomplete discussions with the government of Mali on correspondence that it has received.

Management has requested that its shares remain suspended until 7 August.

What's going on with the Leo Lithium share price?

We don't really know what's going on, which makes this a nervous time for anyone holding Leo Lithium shares.

The discussions with the Malian government appear to have been triggered by Leo Lithium's plans to start exporting direct shipped ore (DSO).

A number of African countries have banned DSO exports recently. Instead of just letting miners dig up ore and throw it on a boat to be processed elsewhere, they want them to process the ore in the country. This is understandable given that it would likely support job creation.

It is also worth noting that there were media reports in the days before Leo Lithium was contacted by the Malian government about potential changes to mining laws in the West African country. Reuters reports:

T]hree sources close to the talks, shows the government aims to take a direct 10% stake in mining projects once a permit has been issued, entitling it to 10% of dividend payments. It would give the state the option to buy an additional 20% within the first two years of commercial production, possibly through a newly created state mining entity.

It is possible that the country's government wants a stake in the company's Goulamina Lithium Project.

However, for now, this is purely speculation and investors will have to wait and see what happens when Leo Lithium finally releases its announcement.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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