eBusiness Weekly
Golden Sibanda
One of Zimbabwe’s most promising batteries lithium mining projects, Prospect Lithium Zimbabwe (PLZ), says an updated desktop study for its Arcadia Mine project near Harare shows it has potential to produce 2,4 million tonnes per annum (Mtpa) instead of the initial estimate of 1,2 million Mtpa.
PLZ’s Australia Stock Exchange (ASX) listed Prospect Resources, said this week that the increased throughput potential would deliver superior returns to the company’s shareholders. As such, the company will undertake a definitive feasibility study (DFS) on the project.
Patson Chimbodza, director at PLZ, said the company’s board had made a decision to double throughput potential for Arcadia to achieve better economies of scale, leaving head room for export to other buyers other than China’s Sinomine, which signed an off take agreement for 70 percent of Arcadia’s output.
“That 1,2 Mtpa is the capacity of the plant to process; it is not the size of the resource. So our board has made a decision to double the production throughput we had envisaged initially from processing 1,2 Mtpa to 2,4Mtpa, which gives us better economies,” Chimbodza said.
He said this will also give the company latitude to supply more batteries lithium to other customers given 70 percent of the production from Arcadia project will go to Chinese firm Sinomine.
PLZ can now supply other markets with more lithium than it could from the balance left by Sinomine.
“Updated desktop studies have indicated that a 2,4 Mtpa throughput scenario will deliver superior return to shareholders, and as such a decision has been made to publish a definitive feasibility study (DFS) on this basis,” Prospect said earlier in a statement on ASX. The electric vehicle batteries lithium miner is developing the Arcadia Mine projects 38 kilometres east of the capital, Harare, with the first phase of the project estimated to cost $52 million. The Arcadia project is projected to go into initial production by June next year.
While a mining feasibility study, evaluation of a mining project, determines if the resource can be mined economically detailed feasibility studies (DFS) are the most detailed and will determine definitively whether to proceed with a commercial mining project. A DFS will be the basis for capital appropriation and provides budget figures for the project. DFS studies require a significant amount of formal engineering work, are accurate to within 10-15 percent and can cost between 0,5-1,5 percent of total estimated project cost.
The DFS will be released to the market before the end of the calendar year. The results specified in the DFS will outline the Company’s capital expenditure and working capital funding requirements.
Prospect is currently reviewing multiple financing strategies to allow Prospect to deliver the project.
Additionally, Prospect is also evaluating the possibility of constructing a downstream lithium chemicals plant at Arcadia to capture a larger portion of the value chain, reduce the company’s waste material and also provide another revenue stream from the mines by-products.
Electric Vehicles are about to reach tipping point in penetration, and as a result investment in battery technology and production is rising rapidly. China’s 2025 target is that over 20 percent of vehicle production in Asia’s largest economy will be EVs. Britain has 2040 deadline for all vehicle sales to be EVs and zero emissions from all cars by 2050.
France’s 2040 deadline is for all vehicle sales to be either EV or hybrid. This is driving demand for underlying battery raw materials including lithium (battery lithium demand has overtaken non battery lithium demand).
On the back of these dynamics industry investment in battery production and its value chain is increasing. Prospect is currently working on a pre-feasibility study for the lithium carbonate plant where a portion of its petalite production will be processed into EV batteries lithium carbonate. Zimbabwe is the first and only African country to successfully set up a lithium-ion battery carbonate plant and is poised for a major and prominent role in the electric vehicles industry.
It is the fifth largest producer of Lithium on the planet (right after Australia, Chile, Argentina and China). Latest data available (2016) estimates annual production at the level of 900 tonnes.
