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World lithium deficit a boon for Zim

01 Oct, 2020 - 00:10 0 Views
World lithium deficit a boon for Zim Lithium

The Herald

Golden Sibanda
ZIMBABWE is among major lithium producers that may draw significant benefits from firm global prices and high demand for the precious mineral due to expected supply deficit projected to start in two years.

Zimbabwe is the world’s fifth largest producer of lithium, albeit with only a single producing mine.

It holds extensive deposits of the on-demand mineral widely used in the automotive and glass industries.

Currently, Zimbabwe has a single active lithium mine, Bikita Minerals, with a number of greenfield and brownfield projects at various stages of development, entrenching its position among the major producers in the world.

The Government classified the commodity as one of the strategic minerals towards achieving its vision of transforming mining into a US$12 billion industry by 2023, after realising the growing demand for lithium.

Prospect Resources, which is listed on the Australia Stock Exchange (ASX) and is developing the Arcadia lithium mine near Harare, is the world’s seventh largest hard rock lithium asset, with a 16-year life of mine (LOM).

As of 2017, Arcadia had a joint ore resources committee (JORC 2012 edition) mineral resource of 43,2 million tonnes, approved and controlled mineral resource of 37,4 million tonnes, while its pre-mining reserves stood at 15,8 million tonnes.

Arcadia is also Africa’s most advanced lithium project. Other fledgling projects in Zimbabwe include the Zulu and Kamativi projects, while Bikita Minerals’ active operation is undergoing expansion to ramp up production.

But even the most optimistic market watchers would not have seen the possibility of better fortunes for Zimbabwe coming so early, and more so, via anticipated acute shortage of the high value mineral by year 2022.

Lithium-ion batteries experienced a compound annual growth rate of 25 percent from 2015-18, driven primarily by an up-tick in electric vehicles (EVs).

Last year, global lithium demand had reportedly jumped to 49 000 tonnes, with 60 percent of that being for use in battery-related products.

Experts say with around a billion light-duty vehicles on the roads, and the number set to rise to 3 billion by 2050, electrifying the global fleet could put a huge squeeze on lithium supply.

Once it goes into production, Prospect will produce both chemical and industrial grade lithium, namely spodumene and petalite and stands to benefit from global shortage along with major producers like Australia, Chile, China and Argentina.

The only African nation on the list of active producers, Zimbabwe produced 1 600 tonnes of lithium in 2018 — doubling the previous year’s total.

The developer of Zimbabwe’s most promising and Africa’s most advanced lithium project, Prospect Resources Plc, says the global market will fall into short supply by 2022, if the existing capacity is not expanded.

The junior mining company said for additional lithium producers to meet the demands of 2022, mine development would have had to start in 2019. The company expects its mine to enter production by second half of 2021.

“Therefore, without further investment in new projects, there will be supply shortage by 2022, where EVs (electric vehicles) will accelerate as they reach cost parity with ICEs (internal combustion vehicles),” said Prospect Resources.

Lithium’s appeal, now being one of the world’s most sought after commodities, has not gone unnoticed and suitors have been knocking at the door.

Prospect has already inked one of the world’s largest ultra-low iron lithium off-take agreements with Sibelco, and the deal entails the supply of 100 000 tonnes for the next seven years after the mines starts producing.

Sibelco is the largest distributor of ultra-low iron petalite in Europe and possibly the world and we believe that this is the largest ultra-low iron petalite off-take agreement ever signed.

“Arcadia now has 100 percent petalite production secured under off-take for the first seven years.

Sibelco’s facility has been processing petalite for over 20 years and will be the facility for further processing and distribution to European customers,” Prospect said

Uranium One Group, is an international mining company of ROSATOM, the Russian State Corporation for Nuclear Energy with a diverse portfolio of assets worldwide, including Africa, has also shown keen interest.

On December 12, 2019 Prospect signed a memorandum of understanding with Uranium One to afford the Russian firm an opportunity to complete due diligence on the company and its Arcadia Lithium Mine.

And subject to satisfactory due diligence, the parties may then negotiate an equity investment terms in Prospect or its subsidiaries; and off take terms for at least 51 percent of the company’s future lithium production.

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