Modern Mining February 2018

COMMENT

Zimbabwe poised to benefit from the demand for lithium

J ust as Mozambique – as I wrote last month – has the potential to become one of the world’s major graphite-producing areas, so too does Zimbabwe have the potential to emerge as a very significant lithium- producing country. I must confess lithium is not a metal I know a great deal about and in all the years I’ve been covering mining I have never once visited a lithium mine – which is hardly surprising as there are not too many of them around, at least in Africa. Zimbabwe, however, does have one active mine, Bikita, near Masvingo, with several other projects on the way. With a production in 2016 of about 1 000 tonnes, the country is reportedly the fifth biggest lithium producer in the world after Australia, Chile, Argentina and China. “Fifth biggest”, by the way, sounds impres- sive but one has to bear in mind that both Australia and Chile are producing far more lith- ium than Zimbabwe – in the case of Australia, more than 18 times as much. Bikita aside, the country’s flagship lithium project is the Arcadia project of Prospect Resources, a company listed on the ASX. Located 35 km east of Harare, Arcadia is said to be one of the largest hard rock lithium deposits in the world with a total resource of 43,2 Mt at 1,41 % Li 2 O and proved and probable reserves of 26,9 Mt at 1,31 % Li 2 O. Prospect – which, despite its Australian listing, has a team of managers with strong Zimbabwean experience (who, for the most part, are based in the country) – is moving at full speed with Arcadia. It completed a very positive PFS on the project in mid-2017 and is now busy with a DFS. In addition, it has lined up China’s Sinomine as its offtake and develop- ment partner. The findings of the PFS defined a 1,2 Mt/a mining and processing operation producing, on average for the life of mine of 15 years, 75 000 t/a spodumene and 155 000 t/a petalite concentrates. The PFS estimated the capital cost of the project at US$52,5 million. Prospect is also evaluating the development of an inte- grated lithium chemical plant at Arcadia. I met up with Harry Greaves, who is Executive Director of Prospect (and a fourth- generation Zimbabwean), and the company’s Chief Geologist, Harry Tyler (whom I first met some years back in the DRC when he was with Anvil Mining), at the recent Mining Indaba. They were both very positive about Arcadia, pointing out that it has now been identified as a priority mining development project by the

Government of Zimbabwe. Present thinking is the company could ‘break ground’ in the first half of this year with a view to having an oper- ating mine around 14 months thereafter. Apart from Arcadia, there are at least two other lithium projects that I am aware of in Zimbabwe – the Zulu project, which is owned by Premier African Minerals, a company which is listed on AIM and which runs the RHA tung- sten mine in the north-west of the country, and the Kamativi tailings project. Located 80 km east of Bulawayo, Zulu is – says Premier – “generally regarded as potentially the largest undeveloped lithium-bearing pegma- tite in Zimbabwe”. The company said recently that it was planning to unlock value for share- holders by having a separate listing for Zulu. A Scoping Study on the deposit– completed last year by Bara Consultants – has identified a target production of 84 000 tonnes of spodu- mene concentrate and 32 000 tonnes of petalite concentrate per year over an initial 15-year life of mine to be the most appropriate option. The capex is estimated at US$64 million. As for the the Kamativi tailings, this resource is located at the historic Kamativi tin mine in Zimbabwe’s Matabele North Province. The tail- ings stockpile has been surveyed to give an estimated 23,19 Mt of historical tailings mate- rial on surface. Chimata Gold Corporation, listed on the TSX-V, has just signed a binding Letter of Intent (LOI) with Zimbabwe Lithium Company Limited which has the exclusive development rights for the deposit as a result of a joint ven- ture agreement with the Zimbabwe Mining Development Corporation. Upon final clos- ing of the transaction outlined in the LOI, it is expected that Zimbabwe Lithium will become a subsidiary of Chimata. While the Arcadia project looks like a dead certainty to go ahead, Zulu and the Kamativi tailings project appear to be less well advanced. However, with the now much more investor- friendly environment in Zimbabwe, and the relaxation of indigenisation requirements, both should have a good shot at entering production. The big question is whether demand for lith- ium is going to hold up in the medium to longer term. Many experts think it will. Increasingly, one sees the metal being referred to as the “new gasoline” – the term was coined by Goldman Sachs a year or two back – and, if this is indeed the case, demand could go through the roof, leading to a boom in lithium mining, not just in Zimbabwe but worldwide. Arthur Tassell

With a production in 2016 of about

1 000 tonnes, Zimbabwe is reportedly the fifth biggest

lithium producer in the world after Australia, Chile, Argentina and China.

February 2018  MODERN MINING  3