eBusiness Weekly
Tawanda Musarurwa
HARARE – Prospect Resources’ Arcadia Lithium project in Zimbabwe has the potential to generate around $3 billion, according to the latest definitive feasibility study (DFS).
The Arcadia Lithium project has been touted as having the potential to become the largest lithium project on the continent.
Based on the proposed 2.4 Mtpa 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.
ASX-listed Prospect Resources says the “successful DFS provides a compelling basis for the company to drive towards completing additional project off-take arrangements (in addition to its existing off-take agreement with Sinomine), and securing project financing in anticipation of construction.”
Construction and mine development, to be managed by Prospect Lithium Zimbabwe (PLZ), is scheduled to be completed in the third quarter of 2020, with commissioning from November 2020.
Commenting on the development Prospect Resources managing director Mr Sam Hosack said:
“The completion of the successful Definitive Feasibility Study on a base case of a 2.4 Mtpa development of the Arcadia Lithium Project is a great achievement. The DFS results position the Company to become a key player in the global lithium market.
“The successful finalisation of this DFS is a testament to the strength of the Prospect owner’s team. A vast amount of work has been contributed to this DFS and validates my belief that Arcadia is Africa’s leading lithium development project with respect to its scale, grade, economics and team.
“This DFS represents a significant milestone for Prospect as we transition into development. We are excited by the opportunity to capitalise on the strong fundamentals of the lithium market, through the production of lithium concentrates.
“Based on the mine economics and financial strength of the project, we are moving swiftly to finance, develop and commence production at Arcadia.
“We have initiated pre-feasibility works to test the viability of a lithium chemicals plant on site, in order to upgrade our product and capture additional value from the lithium supply chain.”
The DFS has shown that the grade of lithium resources at Arcadia will provide significant return on investment for the miner.
“The Arcadia project is in a relatively unique position in that it has the possibility of being able to place its lithium concentrates both in the chemical and the glass/ceramics markets.
“This therefore enables its products to be suitable as source material for almost all end use sectors that use lithium The financial analysis assumes a lithium carbonate price that ranges between USD10 000 and USD12 000 per tonne, with a long-term lithium carbonate price of USD12 000 per tonne (landed China) from the third quarter of the calendar year 2023,” reads part of the study.
“A pricing formula has been applied to the lithium carbonate price in order to determine the spodumene and petalite prices which include the pricing structure in the existing offtake agreement and expected terms for the balance of concentrate.
“This results in the life of mine average price for spodumene and petalite concentrate of US$689/t FOB and US$457/t FOB respectively. LOM tantalum pricing has been set at US$75/lb Ta2O5 in concentrates grading 25 percent Ta2O5.”
Prospect has a number of operations in Zimbabwe, as well as exploration activities in Zimbabwe and the Democratic Republic of Congo.
And Prospect’s flagship project is the Arcadia Lithium Project located on the outskirts of Harare in Zimbabwe.
