Zimbabwe has potential to attract foreign direct investment amounting to US$12 billion over the next five years, Australia Stock Exchange (ASX) listed miner and developer of the country’s most promising lithium project, Prospect Resource, has said.
President Mnangagwa told delegates at an official ground-breaking ceremony for Arcadia project last year that lithium was one sub-sector targeted to leapfrog Zimbabwe’s industrial and economic development to middle income status by 2030.
Prospect Resources Plc, which is developing the Arcadia project in Zimbabwe through its majority owned batteries lithium-ion unit, Prospect Lithium Zimbabwe (PLZ) said in a presentation to investors that Zimbabwe had a vast mineral wealth base.
The miner, which is pitching to investors funding to develop the Arcadia project near the capital Harare, said key minerals included platinum, chrome, gold, lithium, coal, tin, copper, limestone, coal bed methane, natural gas and granite among others.
Zimbabwe holds the second largest deposits of platinum and chrome after South Africa and has lately seen increased interest from lithium investors who, however, say funding still remains a hurdle.
The country needs over US$11 billion to modernise its mines and boost production to maximum capacity over the next five years, the Chamber of Mines of Zimbabwe said early last year.
“Zimbabwe has the second largest platinum and chrome deposits in the world and is the 5th largest producer of lithium in the world. Zimbabwe’s mining sector has great potential for growth with the potential to attract US$12 billion direct investment over the next five years.”
The Government is committed to creating mutually beneficial policies and conditions for the sector’s growth, Prospect Resources said. Zimbabwe’s mineral export receipts were projected to exceed $2,5 billion for 2018, up from $2,3 billion in 2017.
The mining industry is of strategic importance to the Zimbabwean economy, as it contributes around 12 percent of gross domestic product and 68 percent of Zimbabwe’s total export receipts.
Prospect believes that its Arcadia project is one of only a handful in the world that can supply low iron lithium concentrates (Petalite) to the glass and ceramics industry; and battery specification concentrates to the battery markets (Spodumene).
The electric vehicles lithium producer said that many hard rock lithium mines are restricted to the chemical market primarily due to the iron content in their concentrate. It has signed an off take Agreement for 30 percent of annual production over mines first seven years.
Phase 1 of the Arcadia lithium project, expected to earn Zimbabwe $3 billion over a 12 year life of mine (LOM), is anticipated to go into full production in the next 12 to 14 months.
This will follow initial investment of $165 million, with 70 percent of it already secured. Prospect Resources, has since applied for special economic zone status (SEZ) for Arcadia.
In 2009, the lithium-ion battery industry accounted for 21 percent of all annual lithium consumption.
Today, that figure has almost doubled, and battery production – especially batteries for the manufacture of electric vehicles – will continue to gobble up a progressively larger share of lithium.
Government designated the mining sector as one of the key anchors to drive short to medium growth through exports and beneficiation of among other minerals, gold, platinum, diamonds, coal and lithium.
Zimbabwe is now primed for massive economic turnaround as the mining sector, driven by gold, diamonds, coal, chrome and platinum; is set to generate US$12 billion by the year 2030.
Mines Minister Winston Chitando is on record saying Vision 2030, when Zimbabwe is expected to have attained middle income status, would be achieved through massive economic growth, spurred by investments, mainly in the mining sector.