Nevanji Munyaradzi Chiondegwa
Touted as the new oil, for from it, energy to drive the electric car will be made, lithium is one of the many strategic minerals Zimbabwe has and the country is known to have some of the largest reserve I the world.
Zimbabwe’s lithium deposits have always been known but the mineral was not not on demand and fetched low prices. Things however changed drastically when demand for electric vehicles shot up and with it, the need for lithium batteries. The demand for electric vehicles gas made the Zimbabwe government’s Vision2030 possible as mining is one of the key components.
Lithium developers around the world are rushing to secure supplies of lithium, as demand for electric vehicles drives up prices. Last year, lithium prices rose 400% in China, the largest consumer of the product. The price shot up after Russia/Ukraine conflict as people sort alternative energy as crude prices rose. This drove many suppliers to become more aggressive in their search for new lithium deposits.
In the past nine months Zimbabwe has been bombarded by Chinese and British companies targeting lithium. In November 2021, Chengxin, a company listed on the Shenzhen stock exchange in China, announced that its subsidiary, Shengyi International, is to buy a 51% stake in MaxMind Hong Kong for US$76.5 million. A subsidiary of MaxMind Hong Kong owns the mining rights for a total of 40 rare metal blocks. These sit on a total area of 2,637 hectares across the Sabi Star lithium-tantalum project. Chengxin opened a deal to buy Sabi Star Lithium in the same period.
December 2021 saw Huayou another Chinese pay US$422 million for Arcadia from Prospect Resources, the Australian-listed company that was developing the project near Goromonzi. It is a big win for Prospect Resources, which had spent about US$26 million on exploration and evaluation.
February 2022 saw Sinomine Resource Group, another Chinese company joining the queue to snap a stake in Zimbabwean lithium. 
Sinomine Resource Group announced that it is spending US$180 million to buy a controlling stake in Bikita Minerals, Zimbabwe’s oldest petalite producer. Bikita is 74% owned by African Metals Management Services and Southern African Metals, owned by German investor Wilfried Pabst. The other shareholders are Dzikamai Mavhaire (16%) and Nehemiah Mutendi (5.25%).
Hardly a month later in March 2022, Red Rock Resources plc, a UK-listed exploration company, acquired lithium claims in Zimbabwe and says it is setting up a lithium exploration unit in the country to hunt for more. The company, quoted on London’s AIM market for smaller companies, buys land in Bikita, near where Bikita Minerals has already been mining petalite. Red Rock will establish a new company, African Lithium Resources (ALR), in which it will hold 75%. The other 15% will be held by an unnamed local partner.
In the same period, UK resources investor Galileo Resources starts exploring for lithium and gold in Zimbabwe after being granted the option to acquire 51% of a local prospecting firm. Galileo, listed in London, will spend US$1.5 million to explore for lithium and gold at claims held by BC Ventures over the next two years. BC Ventures’ unit Sinamatella Holdings was one of the companies granted Exclusive Prospecting Orders in March 2021. Sinamatella holds an EPO for a potentially lithium-rich area in Kamativi, as well as another two EPOs for two gold areas near Bulawayo. This will be the company’s first time in Zimbabwe.
April 2022 saw another UK-listed Premier African Minerals (PAM) signs a binding joint venture agreement with Li3 Resources for a lithium project in Zimbabwe. Li3 Resources of Australia, which sold the portfolio of assets to PAM earlier in 2021, will purchase a 50% interest in Premier African’s hard-rock lithium assets in the Mutare Greenstone Belt in Zimbabwe. Li3 has until the end of December this year to purchase the stake by spending US$250,000 on exploration. PAM already holds the Zulu Lithium claims at Fort Rixon, about 80km from Bulawayo.
Kamativi Tailings will see the previously tin mine reinvented as a lithium operation. This will involve treating the old dumps to search for lithium-bearing minerals. The Kamativi Project is a joint venture between the Zimbabwe Mining Development Corporation (ZMDC), owners of Kamativi Tin Mines which holds 40% of the Project, and Canada’s Jimbata, which holds 60%. Disputes over the claim with a Chinese company have delayed the project. The company believes there is US$1.4 billion worth of lithium in the dumps.
Below are projects that are currently in the exploration stage. In future, these may be bought up by larger investors, as has been the case with projects such as Arcadia.
Australian-listed explorer Six Sigma bought into Mirrorplex, which is exploring for lithium in Shamva. A drilling programme to find out the extent of the resource started in 2018. A report on the company’s website says that surface rock sampling have shown at least “five large areas containing extensive lithium mineralization” across the entire project area. Six Sigma is headed by Patrick Holywell, while Mirrorplex is headed by its co-founder, Nyasha Chidoh.
Another is Ireland’s gold and zinc explorer Arkle Resources, listed on London’s AIM market, was in June 2022 granted three licenses covering a small area of 163 hectares in Insiza district, and the company sees it as a low-cost entry into the country. “This is a toe-in-the-water exercise by Arkle,” says company chairperson John Teeling, who adds that his directors have experience in Zimbabwe and have examined the potential for hard rock lithium in the country.
More details on the deal involving the Chinese battery giant which bought Zimbabwe’s Arcadia lithium mine for US$422m. Huayou is the world’s biggest producer of cobalt, a metal used in EV batteries. It has assets of close to US$8 billion and made US$2.1 billion in revenue between January and June 2021.Prospect is listed on the Australian Stock Exchange and developed Arcadia mine in Goromonzi. Huayou Cobalt, the company that has bought the Arcadia lithium mine from Prospect Resources, says it has budgeted US$300 million to bring the project to production. By June 2021, Prospect had spent US$25.7 million on exploration and evaluation on Arcadia, according to its financials. And they were paid US$378 million for their 87% stake in the project.
“Huayou intends to develop the project rapidly over the next year and invest around US$300 million to develop the mine and construct a processing plant with a capacity to treat around 4.5 million tonnes of ore and produce 400,000 tonnes of lithium concentrate per annum,” according to Huayou Cobalt Zimbabwe general manager Haijun Zhu. According to Huayou’s Haijun, Arcadia plans to employ 600 local staff for the construction phase and up to 900 when full production starts. Arcadia has an 18-year life of mine. Earnings over the period are estimated at US$175 million per year, based on forecast lithium prices.
In 2019, Prospect got Special Economic Zone status before they sold the mine, which gives it generous tax holidays and lowers the cost of developing the project.
Huayou has started construction, and plans to “rapidly” develop it under a US$300 million investment. This includes a processing plant with a capacity to treat around 4.5 million tonnes of ore. Prospect did not have the finance the open the mine and after investing 26 million, they spent 2 years looking for a buyer until the Chinese came in to take it off their hands.
The Competition and Tariff Commission (CTC) approved the Prospect takeover, saying it saw no monopoly risk locally; there is no local market for lithium concentrates and all output will be exported.
“Given the analysis above, the transaction was approved subject to the condition that: i) the merged entity, its subsidiaries, affiliates and successors in title should undertake to produce battery grade lithium in Zimbabwe within five years of receiving this determination; and ii) the merged entity submits to the Commission its plan to implement the condition above,” CTC says.
In response the new Arcadia mine owners said, they expect to deliver its first batch of lithium-bearing minerals spodumene and petalite in 2023. They also said making battery-grade lithium locally makes no economic sense. Huayou said their new plant will process lithium for export, They also said that a converter to produce battery-grade sulphates is not viable for the following reasons:
“For each tonne of battery-grade lithium carbonate production, it needs 2,800 kWh of green (renewable) power, 500-600 cubic metres of natural gas, 2.2 tonnes of concentrated sulfuric acid (98.5%), two tonnes of first-class sodium carbonate, 20kg of first-class sodium hydroxide, four tonnes of heavy calcium powder, and 1.6 tonnes of food-grade carbon dioxide,”
A converter to make lithium sulphate is possible in ten years, but only if all the requirements are in place, the company says, “There is a chronic shortage of these supporting and auxiliary materials in Africa, and the costs incurred by importation would be huge and unaffordable. It is worth noting that processing enterprises will be uncompetitive in a global market without cost-competitive inputs, raw materials, gas and power, and first-class sodium carbonate.”
Last month the new investor and CTC had struck a deal. The company plans to build only the concentrator plant to process lithium ore, but says a converter to produce battery-grade lithium is not in the company’s plans. Huayou says it has held talks with CTC and agreed to continue with its original plans.
Prospect the seller of Arcadia Mine is pursuing new ventures in Zimbabwe. In 2018, Prospect acquired Lipropeg, a set of claims near Bindura, where it has been exploring for lithium, part of the funds from the sale are now used for this project. Prospect also acquired another potentially high-grade lithium deposit 8km north of Arcadia. Exploration has started there to find out the extent of the resource
Recent Comments