Belgium’s Sibelco in talks to buy lithium from Zimbabwe’s Arcadia mine

Sibelco's plant in Brazil: The company is in preliminary talks for Zim lithium

Belgium’s Sibelco, one of the world’s largest glass-ceramic manufacturers, is in talks with Prospect Resources that could see the company buying lithium from Zimbabwe’s Arcadia Mine.

Prospect Resources and Sibelco on Wednesday announced they had entered into an MoU to work on a possible offtake agreement for ultra-low iron petalite from Arcadia, the mine that Prospect Resources is developing near Goromonzi.

The MoU will allow an exclusive period of time for the two companies to negotiate and execute a binding offtake agreement by 1 June 2020. The Sibelco MOU does not bar Prospect from continuing discussions that is currently holding the Uranium One Group, which could see the Russian-owned metals group taking up stock on Prospect and signing its own offtake agreement.

Offtake agreements are usually done even before production at a mining operation starts. For Prospect and Sibelco, if they reach a deal, Sibelco will make a commitment to buy a certain amount of lithium from Arcadia at a specified price. Because they guarantee that a mine will find buyers for its products, offtake agreements make projects such as Arcadia more bankable.

The ultra-low petalite that Arcadia will produce is used in the glass and ceramics market. Prospect had announced in January that its samples had passed one of the critical stages towards qualifying for marketing in Europe. The glass and ceramics industry consumes over 130 000 tonnes per annum equivalent of ultra-low iron petalite.

Sibelco is a privately owned company, based in Antwerp, generating annual revenues over €3.5 billion, operating 174 production sites in more than 30 countries. Sibelco’s main products are silica, high purity quartz and speciality minerals such as petalite

Prospect’s Executive Chairman, Hugh Warner said: “I am pleased to announce that we have signed an MOU with Sibelco for Arcadia’s premium ultra-low iron petalite. Sibelco is the largest distributor of ultra-low iron petalite in Europe and possibly the world. Once in production, Prospect will be the largest ultra-low iron petalite producer in the world.”

Offtakes

In December, Prospect signed an MoU with Uranium One, the Canada-based unit of Russia’s Rosatom, that could see the miner take up a stake in Prospect and buy over half of the lithium from Arcadia mine. Under the MoU, Uranium One was granted an exclusive period to complete due diligence, leading to negotiations for equity in Prospect and at least 51% of future lithium production from Arcadia.

In 2018, Prospect signed an offtake agreement with Shenzhen-listed Sinomine, who agreed to buy 30% of Arcadia’s annual production over seven years. Sinomine bought equity in Prospect for US$10 million and put down a further US$10 million in advance for Arcadia’s lithium concentrates.

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