ASX listed Prospect Resources Limited (Prospect) has engaged government in discussions with potential financiers for its multi-million dollar Arcadia lithium mine with a view to start full-scale production once funding is in place, a company official has said.
The Arcadia project is about 40km outside Harare. Prospect general manager, corporate affairs Nick Rathjen told Business Times the company has been focused on funding the development of the project, with the aim for near term production within 18 months from completion of funding.
The project’s ground breaking ceremony was held last December. “Prospect is working with the Government to reach financial close with our prospective financiers, so that the company may commence full scale development and production, which will in turn put Zimbabwe on the global map as a leading lithium producing nation,” Rathjen said in emailed responses.
This comes as business struggles to raise capital into Zimbabwe due to macroeconomic and currency risks largely stemming from shortage of foreign currency inflows. This has hampered smooth repatriation of dividends to foreign investors.
Rathjen said there is already some demonstration of demand for the company’s product. “The company alongside its funding activities has undertaken extensive marketing activities across Asia, Europe and exploring opportunities in northern Africa where there are customers demanding these premium low iron lithium products,” he said.
Rathjen said there has been some development on site with the completion of the miner’s camp and working shed facilities. “One key progress which has been made is the completion of an independent report by leading lithium research consulting group, Benchmark Minerals Intelligence, who confirmed that the Arcadia Lithium Project is able to produce ultra-low iron lithium products that would be considered premium products and would receive premium pricing,” he said.
Prospect recently announced plans to double mine life at Arcadia.
Prospect executive director Harry Greaves said exploration around the company’s deposits in Zimbabwe is ongoing with potential for new resources in the region. Lithium has a lot of potential on the global market and is largely seen as a game changer for Zimbabwe’s mining industry which boasts of one of the largest deposits of the mineral in the world. Zimbabwe is said to have potential to produce 20 percent of global lithium.
Although it is not an immediate focus, given the company is still at capital raising stage for a two phased $600 million project at Arcadia. So far, investment worth US$30 million has been spent on the project, now employing 100 people directly and 2 000 more indirectly.
The company is on record saying it is looking for other lithium opportunities and other battery mineral opportunities in Zimbabwe and the region. Phase one of the project is to produce the concentrate and the capex is at US$163 million, US$30 million of which has already been spent, and phase two depends on the size of the mine. Arcadia is the largest code compliant hard rock lithium deposit in Africa.
The plant at the mine, when completed will process 2,4 million tons of ore annually. Prospect has an 87 percent interest in Arcadia.