Arcadia seals electricity deal

PROSPECT Resources, developer of the Arcadia Lithium Mine near Harare, has struck a “secure” power supply agreement with State power utility Zesa, which enables it to develop its electric vehicle batteries lithium project.

An amount of US$162 million is required as capital expenditure to develop the lithium project to production and it is expected this will take about 18 months from the date of financial closure of project finance.

Development of Arcadia is key to Government’s vision of growing mining to a US$12 billion by 2023 and a definitive feasibility study (DFS) proved the lithium project will earn Zimbabwe at least US$3,5 billion over its life of mine.

It is Africa’s most advanced lithium-ion batteries project, which will raise Zimbabwe to be the 5th world largest producer, when it comes into production next year. Zimbabwe has one producing lithium mine, Bikita Minerals.

Large lithium deposits in the country present Zimbabwe an opportunity to capitalise on growing lithium-ion batteries demand across the world, including growing demand for and transition to non-combustible fuel cars.

The mine also possesses ultra-low iron lithium deposits that can go directly into the glass and ceramics manufacturing with leading manufacturers overseas having completed initial tests of samples from the Arcadia project.

As such, Arcadia’s primary source of power supply will be Lake Kariba, a hydroelectric power station, whose main power distribution lines run adjacent to Arcadia, 15 kilometres away via the Atlanta substation.

Supply will start in January next year for period of three years, which is automatically renewable for similar term, but the tariff for the power will be determined by a statutory body that regulates the energy sector.

In the event of a major system fault, maintenance or major power supply shortfalls that may temporarily interrupt power supply to Arcadia, Zimbabwe Electricity Transmission Authority (ZETDC) has to provide advance notice. ZETDC is the distribution arm of Zesa and is part of the utility’s other divisional units that include the generation arm, Zimbabwe Power Company (ZPC) and information communication technology service provider, Powertel.

“The development of the Arcadia Lithium Mine must be underpinned by secure, long term energy supply and the SPSA (Secure Power Supply Agreement) is the first stage in this process,” said Prospect Resources Plc managing director Sam Hosack.

Amid acute power shortage Prospect will pursue alternative sources of power, including a possible solar farm. Arcadia is the world’s seventh largest hard rock lithium asset fully permitted to commence.

Arcadia Mining is expected to reach an annual production of 2,5 million tonnes of lithium ore after the mine is deployed. The mineral already has joint ore resources certified reserves of over 43 million tonnes.

Because of its strategic importance, the Arcadia lithium project has already been accorded Special Economic Zone Status (SEZ), rendering it available to a number of special incentives that will catalyse its progress.

Existing operational supply currently in place can only meet demand to 2021 and for producers to meet the demand from the market in 2022, development of additional capacity would need to commence in 20192.

As such, without further investment in new lithium extraction projects there will be a supply shortage by 2022 where EV growth will accelerate as they reach cost parity with internal combustion engine (ICE) vehicles.

Zimbabwe’s lithium deposits are second to none in Africa, and proven deposits are located in Bikita, Goromonzi, and Kamativi. At present, Zimbabwe’s mining industry is dominated by gold, platinum, diamonds, nickel, chrome and coal and lithium will become one of the country’s major mining industries soon.

Source: Herald

Post Author: Chido Luciasi

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