New lithium developer invests US$130m in Sabi Star mine, sees first output in 2023


Chengxin, the Shenzhen-listed company that has acquired lithium prospects in Zimbabwe, expects to spend US$130 million to develop the new Sabi Star mine in Buhera.

The company, listed on the Shenzhen stock exchange, spent US$76.5 million last September to buy 51% of MaxMind, which held claims. The acquisition was the first of a series of deals since then by Chinese and UK miners looking for lithium in Zimbabwe.

“We have spent US$22 million in the work we have done so far, and this includes exploration, feasibility studies and ongoing construction works. By the time we start producing lithium concentrate, we should have injected US$130 million. This should be done by the end of the second quarter of 2023,” MaxMind Zimbabwe project manager Elfas Mugova said.

Resource estimates give a life of mine of six years, but the company plans to expand this through further exploration, Mugova said.

“By the end of this month (July), the first batch of the plant equipment will be arriving in the country. Since the construction of the plant is hinged on exploration work done in the last four years where we established a mining lifespan of up to six years, we need to grow that to beyond 20 years.”

The operation has 55 mining claims astride some 3 800 hectares.

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Lithium value addition?

Lithium developers are under pressure to make battery-grade lithium, but they say Zimbabwe does not have the infrastructure or the inputs to make this possible. The Competition and Tariff Commission recently told Huayou Cobalt, which is developing the Arcadia mine near Harare, to commit to producing battery-grade lithium in five years. But the company said this will not be profitable.

MaxMind’s Mugova agrees. While the company does see itself smelting lithium concentrate into lithium hydroxide in the future, this would need investment of at least US$250 million plus reliable, clean energy.

“You would not want to build a smelter where you will have frequent power cuts. That on its own will affect the operations of the smelter. So, we need to have reliable power first to confidently set up a plant of that nature,” Mugova said.

MaxMind plans to install 12MW of power to feed its plant.

The company’s costs so far include the construction of at least 40 homes to relocate people from the mining area.

“The affected families will get a monetary compensation of US$1,900 upon taking occupation of their new houses, and then US$150 for six months,” he said.

The company is also spending US$1.2 million to upgrade the road from Gaza Business Centre to Sabi Star Mine, which will sit on the Bepe Hills of Buhera.

The lithium links

Chengxin’s recent deals show just how the big companies investing in lithium are aligning to secure supplies of the metal used in electric vehicle batteries.

BYD, one of the world’s biggest battery makers, bought 5% of Chengxin in March for US$449 million so it can get preferential prices for lithium. In April, a report said BYD was looking to buy six African lithium mines.

In April, Chengxin Lithium bought a 51% stake in the Kenticha lithium mine in Ethiopia and bought Lithium Chile, which has some of the world’s biggest resources of the metal.

Chengxin is also partnering with Tsingshan on a lithium processing facility in Indonesia. Tsingshan, the world’s biggest stainless steel company, is currently building a steel plant in Zimbabwe, and has expressed interest in prospecting for lithium.

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