Prospect Resources exits DRC to focus on Zimbabwe lithium project

Zimbabwe mining lithium
Trucks at Bikita lithium mine: Zimbabwe hoping to become a major lithium producer

Prospect Resources is selling its business in the Democratic Republic of Congo to focus on its Arcadia lithium project in Zimbabwe, the Australian-listed firm has announced.

The company is selling Prospect Cobalt, its exploration business in the DRC, to New Energy Metals, a privately held company based in Perth.

The transaction follows Prospect’s decision to scale back exploration activities and focus on the lithium asset, where it broke ground in 2018.

Prospect’s Managing Director, Sam Hosack, said “The Arcadia Lithium Project is a top ten global hard rock lithium asset with strong project economics. It is shovel ready and we are currently sourcing funding to allow us to commence development. Therefore, Arcadia will be the primary driver of shareholder value in the near future, and by divesting the Company’s explorational activities in the DRC, Prospect can re-allocate capital to improving Arcadia’s project economics and moving the Project into development.”

Prospect broke ground at the Arcadia site in November, at a ceremony presided over by President Emmerson Mnangagwa, who spoke of Zimbabwe’s “pursuit to be a significant global player in the lithium mining industry”.

In December, Prospect shipped Africa’s first battery-grade lithium carbonate, as it steps up efforts to produce and find markets for a compound that is in high demand for use in rechargeable batteries. Although lithium demand is primarily driven by the battery market, Prospect is also looking to tap into rising demand for lithium use in the manufacture of glass, ceramics, glass-ceramics and metallurgical products.

To secure a future market for its lithium, Prospect has signed an off-take arrangement with Shenzhen-listed Sinomine, who will buy 30% of Arcadia’s annual production over seven years. Sinomine has already bought equity in Prospect for $10 million and is to pay a further $10 million in advance for Arcadia’s lithium concentrates.

Zimbabwe has made lithium its major draw for foreign investors in mining, with several players such as Premier Africa Minerals, Lithium Consolidated Limited and Bikita Minerals taking part.