eBusiness Weekly
Tawanda Musarurwa
Zimbabwe-focused lithium developer Prospect Resources, is mulling the development of a solar farm as part of its longer-term strategy to set up alternative energy supplies for the Arcadia Lithium project.
The miner has also said it is considering purchasing power from the Southern African Power Pool (SAPP), a cooperation of the national electricity companies in Southern Africa under the auspices of the Southern African Development Community (SADC).
“Prospect Resources continues to consider alternative secondary power supply options including purchase of power from the South African Power Pool, a power purchase agreement with the existing Cahora Bassa hydroelectric scheme or even the creation of a solar farm on site to ensure that it has the appropriate power solution with contingencies to support the development and operations of the Arcadia Mine,” said managing director Sam Hosack.
The Arcadia Lithium project has been touted as having the potential to become the largest lithium project on the continent.
Based on the proposed 2.4 Mtpa mining and processing operation, an earlier definitive feasibility study showed that the Arcadia project will be a strong financial, high margin project with current forecast Life of Mine (LOM) revenue of US$2,93 billion and average annual EBITDA of US$106 million over an estimated 12-year mine life.
To this extent is requires both reliable and significant levels of electricity supplies.
Management said whatever energy projects in Zimbabwe the Australia Stock Exchange-listed company will get into, the projects should have a wider impact on the country’s economy.
“The development of Arcadia creates opportunities for other investment and projects to either directly or indirectly benefit from the project’s operations,” said Hosack.
“Prospect is creating an ecosystem anchored by the Arcadia Mine. This positive multiplier effect will boost investment in Zimbabwe and deliver a raft of benefits to the economy and the community.”
But in the intervening period, the mining firm has signed a memorandum of understanding (MoU) with African Continental Minerals for the supply of power to the Arcadia lithium project.
In terms of the non-binding MoU with African Continental Minerals will provide Prospect Resources with power supply optionality for the project while also generating opportunities for additional services or projects, such as ACM’s coal bed methane gas-to-power project, to be developed.
The MoU sets out key terms for a subsequent formal offtake agreement as the Arcadia lithium project is developed, which include: an agreed term of five years from the commencement date (to be outlined in a definitive agreement); minimum supply of 20 MW daily power to meet all of Arcadia’s power supply requirements (Arcadia’s peak power requirement is 16 MW); and an option for an additional 25 MW of supply in the event of further expansion of the facility or downstream processing (lithium carbonate or hydroxide plant).
African Continental Minerals currently holds two Special Grants containing a total 245 000 hectares and is awaiting the final approvals on a third asset. All assets are covered by existing power lines ranging from 11 kV to 33 kV.
Drilling test and production wells will be placed within 4 to 8 kilometres from power distribution lines.
The Arcadia Lithium project’s primary source of power supply is from the national electricity grid that is owned and operated by Zimbabwe Electricity Transmission and Distribution Company, whose main power distribution lines runs adjacent to Arcadia, some 15km away.
And although Prospect Resources has secured Arcadia’s required supply at this interconnection, the MoU provides Arcadia with optionality for power supply and competitive tension for future supply agreements.
