Despite low prices and previous doubts, Huayou’s Prospect considers stepping up value addition with new plant

Workers at Prospect Lithium Zimbabwe mine

Prospect Lithium Zimbabwe plans to set up a lithium sulphate plant to comply with local processing rules, despite falling prices slowing down investment globally.

Huayou Cobalt, one of the world’s biggest miners, bought the mine in 2021 from Australian-listed Prospect Resources. The company produced about 280,000 ounces of lithium concentrate in 2023, but plans to double this in 2024 may be hurt by lithium prices, which fell by up to 80% last year. The mine, developed for US$300 million, can produce 450,000 ounces per year.

Miners currently process raw lithium into concentrates for export. Government wants them to go further and produce battery-grade lithium, a further stage of processing. This is despite doubts by the industry that this viable in Zimbabwe currently. However, Prospect General Manager Henry Zhu says his company is assessing sulphate production feasibility.

“I am excited to announce that we are currently doing feasibility studies for a state-of-the-art lithium sulphate plant. This plant will not only enhance our production capabilities but also contribute to the overall well-being of our country and economy,” Zhu says.

The company recently celebrated two years of operation, which Zhu says had its challenges: “The past two years have been filled with challenges, uncertainties, and obstacles, but through it all, we have persevered, adapted, and thrived.”

Zimbabwe banned the export of lithium ore in 2022, although most miners were already setting up processing plants. Finance Minister Mthuli Ncube has given miners up to March to submit plans for further value addition to battery-grade lithium.

In a recent compliance report, the Competition and Tariff Commission said Prospect “had commenced the scoping study stage, set to finish in the first half of 2024, meeting the condition timeline” for a sulphate plant, a condition for the Huayou takeover.

Lithium miners have previously doubted the viability of making battery-grade lithium in Zimbabwe.

“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,” Huayou said in 2022.

A converter to make lithium sulphate is possible in ten years, Huayou said then, but only if all the requirements are in place.

“This is subject to the availability of sufficient green (renewable) power, natural gas, sulphuric acid and heavy calcium powder in Zimbabwe, and subject to the economic feasibility of production of lithium sulphate under Arcadia Project,” said Huayou.

Zimbabwe’s lithium exports grew by 854.7% from US$70.6 million in 2022 to US$674.0 million in 2023 as new mines started production.

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