ASX-listed miner needs $250m for lithium plant

22 Jun, 2018 - 00:06 0 Views
ASX-listed miner needs $250m for lithium plant Minister Chitando

eBusiness Weekly

Golden Sibanda
Australian Stock Exchange (ASX) listed Zimbabwe focused battery grade lithium producer, Prospect Resources Plc, says it may require as much as $250 million to build a full-scale lithium carbonate plant in Kwekwe, in Zimbabwe’s central province of Midlands.

For this to be achieved Prospect Resources said Government must continue to provide support to the industry to enable Zimbabwe’s lithium companies to access long term capital on the global markets.

President Mnangagwa is expected to commission Prospect Resources’ Kwekwe-based pilot lithium carbonate plant soon. The plant has already produced 99,5 percent battery grade lithium, which could go straight into the manufacture of electric vehicle batteries.

The plant is critical to test the possibility of producing higher value electric vehicle battery lithium (lithium-ion battery) carbonate in Zimbabwe, which will be the first such on the African continent.

This comes as Zimbabwe is lining up several lithium projects, with a total of four already at various stages of development, to capitalise on the growing demand for the highly sought after mineral required for use in lithium-ion battery powered electric vehicles
Prospect is in the process of building the design or the model of its lithium concentrate plant for the Arcadia lithium project, located 38 kilometres east of the capital Harare, which is expected to go into production by the end of the second quarter of next year.

Prospect targets beneficiation
Chief executive Harry Greaves told Business Weekly in an interview this week that the ASX listed miner was still doing designs for its lithium concentrate plant, and will thereafter embark on the fund-raise programme, targeting concentrate production by June 2019.

The lithium carbonate plant will provide Zimbabwe and Prospect an opportunity to optimize earnings from lithium, as the plant will allow the ASX listed company an opportunity to beneficiate its concentrate, which would fetch higher prices on global markets.

“Once we are done with the concentrate plant funding and design, we will start raising funding for the lithium carbonate plant. (The funding requirements) are going to depend on the scale of production.

“But on the basis of our budgeted production of 25 000 tonnes of lithium carbonate, we may need $250 million. However, it would be sensible to build the plant in modules of 8 000 tonnes until we reach 25 000t,”he said.

Greaves reiterated earlier remarks, which were shared by other producers including Bikita Minerals, Zulu lithium and Zimbabwe lithium projects that Zimbabwe must do everything practically possible to capitalise on the window of opportunity within the next two years and raise requisite funding for its lithium projects.

He however applauded Government efforts for current continuous efforts to address issues besetting the sector, acknowledging Mines and Mining Development Minister Chitando was alive to what needed to be done.

So bright are prospects for lithium-ion batteries, the future of automobile, that Prospect Resources has sold 70 percent of its as yet unmined battery grade lithium to customers in Asia and now negotiating purchase agreements for the balance of 30 percent.

However, within the 30 percent of its unmined lithium, the ASX listed lithium miner will reserve some for its Kwekwe lithium carbonate plant, with the pilot plant having recently been successfully completed.

Zim must capitalise on window
Greaves said Zimbabwe must move with speed, given production plans by the world’s largest producers of battery grade lithium and current established capacity, notably SQM of Chile, to facilitate the development of the lithium industry with the next two years.
This will entail creating an environment that encourages foreign investor confidence in Zimbabwe, a critical factor in getting investors to commit their capital to a jurisdiction long considered high risk area.

President Emmerson Mnangagwa has declared “Zimbabwe is open for business” since taking over the reins in November last year, as part of concerted efforts to attract significant inflows of foreign direct investment to ensure the economy makes up for lost ground over nearly four decades under ex-president Mugabe.

Greaves said that Zimbabwe must quickly develop its lithium industry and optimise the benefits from the “precious metal” to avoid a similar scenario to what is happening with platinum, which has seen supply flooding global markets resulting in declining in prices.
Astronomical rise in lithium demand

Since 2016 the price of Lithium has more than doubled. One of the major reasons is that the demand for lithium, also known as “white gold” has increased.
Tesla and other electric vehicles require the metal for its use in lithium-ion batteries that power electric cars.

It’s all happened rather fast. Electric vehicles accounted for virtually zero lithium-ion demand a decade ago, said Christophe Pillot, a partner and director at Paris-based Avicenne Energy.

The batteries first began appearing in electric vehicles in 2006. But it took until 2014, when automobiles accounted for nearly 15 000 megawatt-hours, for vehicles to exceed a 25 percent share of the world’s total lithium-ion supply, according to Avicenne data.
Between 2014 and 2017, electric vehicles’ use of lithium-ion more than quadrupled to more than 71 000 megawatt-hours, with a similar jolt forecast by 2023.

Electric vehicles reached 50 percent of lithium-ion demand in 2016, although it inched past consumer electronics for the first time the year prior, according to Avicenne data.
With electric-vehicle sales rising and demand for smartphones slowing, the gap will only grow wider, according to Bloomberg.

Every smartphone and fully electric car in the world is powered by the same type of battery. Such are the benefits of lithium-ion technology that, in less than 30 years, it has gone from zero market share to having nearly the same market share as the age-old lead-acid battery.

Tianqi Lithium, a Chinese company, recently paid more than US$4 billion to become the second-largest shareholder in Sociedad Química y Minera (SQM), a Chilean mining company.

The deal gives the company effective control over nearly half the current global production of lithium, a critical component in battery technology, which the Chilean government worries fearing giving Tiang Lithium too much control could distort the lithium market.

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