eBusiness Weekly
Golden Sibanda
Prospect Lithium Zimbabwe (PLZ), touted Africa’s largest lithium project, plans to investment $500 million when it embarks on phase 2 of its Arcadia project near Harare soon to refine and beneficiate the mineral into lithium carbonates.The company will invest $165 million into the first phase of its Arcadia project, about 38 kilometres east of Harare.
Prospect will build a plant with capacity to process 2,4 million tonnes per year. Arcadia project has 43,2 million resource estimate over 25 years lifespan. Four hundred jobs will be created.
President Mnangagwa commissioned the first phase of the lithium project in Harare on Wednesday stating that lithium will be a key sub-sector of Zimbabwe’s industrialisation and modernization agenda.
Mining already generates 60 percent of Zimbabwe’s annual export earnings and accounts for about 13 percent of the country’s gross domestic product (GDP). The country is targeting $12 billion in mineral exports by 2023 while mineral exports were projected to hit $3,7 billion by end of this year.
Phase one of the Arcadia lithium project will earn the country nearly $3 billion over a 12 year mine of life period at $106 million earnings before interest, tax depreciation and amortization (EBITDA).
But phase two would see prospect investing half a billion dollars in building a plant that will significantly value add its lithium concentrates up to 99,5 percent battery grade lithium carbonate for the export markets.
At this point, it is expected that electric vehicle battery, glass and ceramics manufacturers would then be able to set up operations in Zimbabwe, earning the country significant hard currency.
Lithium has gained global prominence due to its wide use in the manufacture of electric vehicle (EV) batteries with demand expected to reach tipping point in penetration.
For instance, China’s 2025 target is that over 20 percent of vehicle production will be EVs.
Britain has 2040 deadline for all vehicle sales to be EVs and zero emissions from all cars by 2050.
As such investment in battery technology and production is rising rapidly.
The high value mineral is also used in glass, ceramics, portable electronics, lubricating greases and energy storage devices among others.
“In the second phase, like you have heard before, we have successfully produced 99,5 percent lithium carbonate from our pilot plant in Kwekwe, which is currently running as we speak.
“ And the second phase, once we are happy with the proof of concept, once we learn the ropes in terms of being confident and taking the rocks out of that, we see the second phase kicking in somewhere between year 3 and year 5.
“And that is much bigger Capex, we are talking about half a billion dollars investment,” Prospect Lithium Zimbabwe executive director Paul Chimbodza told Business Weekly in an interview.
He said the further investment would earn the company and country significantly more, as this will entail exporting value added material, which has better market value and is less bulky.
“This is important on two fronts; if we are going to export semi-finished product you are just paying a lot of shipment costs for wastes so it makes business sense to value add and export high value product.
“The second one is that Africa has been known as a source of raw materials the world over.
‘‘It is high time as Africa and we think as Prospect Lithium Zimbabwe we are playing our part in terms of getting the momentum from an Africa perspective.
“We have got the resources and we must beneficiate them here and hopefully the end use product could be manufactured here, that is our long term view,” Chimbodza noted.
The Australia Stock Exchange (ASX) listed parent of PLZ, Prospect Resources Plc, says the Arcadia lithium project, has proven capacity to generate nearly $3 billion in export revenue, according to a recent definitive feasibility study (DFS).
Based on the proposed 2,4 million tonnes per annum mining and processing operation, the DFS indicates that Arcadia will be a strong financial, high margin project with current forecast Life Of Mine (LOM) revenue of US$2,93 billion and average annual EBITDA of US$106 million over an estimated 12-year mine life.
Zimbabwe has one producing lithium mine, Bikita Minerals, and a total of four other developing lithium projects including Kamativi (Mat North Province), Zulu Lithium (near Bulawayo) and Lutope in Hwange.
