The Sunday Mail
Golden Sibanda
Senior Business Reporter
Australian Stock Exchange (ASX)-listed electric vehicle lithium batteries company, Prospect Resources Plc, is bullish about the Zimbabwe’s economic prospects and believes the currency reforms Government started in February this year, were a crucial step that would yield long-term benefits.
Prospect is developing the Arcadia project, commissioned by President Mnangagwa in November last year, just 38 kilometres east of Harare, which is ranked as the most prestigious lithium mine in Zimbabwe and Africa.
Arcadia will be the first of several multi-billion dollar investments that will come on-stream under the incumbent administration. Studies have confirmed the project as highly profitable. It will generate over US$3 billion in exports for Zimbabwe.
The project is also integral to Government’s target of a US$12 billion mining industry by 2023 and is major stepping stones to President Mnangagwa’s grand vision of Zimbabwe achieving middle income status by 2030.
In recognition of the mining initiative strategic importance to the economic growth of Zimbabwe, the Arcadia Lithium Project was earlier this year granted Special Economic Zone (SEZ) status.
The ASX and Frankfurt listed junior miner said 2019 has largely been a transition year for President Mnangagwa’s new administration, which took over from late former president Mugabe in November 2017.
Zimbabwe dollar
Prospect said Government was spot on, when it made the decision to adopt a freely floating domestic currency (Zimbabwean dollar) after using a US dollar dominated multi-currency regime since February 2009.
Zimbabwe reintroduced domestic currency in February this year, and made it the sole legal tender in June, as it faced critical shortage of the greenback while business quoted most goods and services in US dollars. The company said while the transition to a local currency had resulted in shorter volatility and disruption to business and the economy, the decision was the right thing to do as it will yield desired results in the future.
Prospect chairman Mr Hugh Warner said his company was overly excited to be a part of the Zimbabwe story and will play a critical part in the country’s economic development over the coming decades.
“Although we do not participate in or hold a political agenda, we are focused on working with government to deliver positive outcomes for Prospect Resources and all of our stakeholders.
“2019 has been a transitional year with the government in February 2019 moving away from a currency that was pegged to the US dollar, to now a floating currency.
“This has lead to short term volatility and disruption, but is a crucial step in Zimbabwe developing as a nation that will yield long term value and improved fiscal stability,” Mr Warner said.
Mr Warner said Prospect had rapidly transitioned from exploration, discovery, completion of feasibility studies and was now in the financing and development phase of the Arcadia Lithium Project.
It has taken the company less than three years from the first exploration drill hole to completion of a Definitive Feasibility Study (DFS) that validated Arcadia as a world class and globally unique asset, with the rapid progressing of the company occurring at a faster rate than its peers.
Lithium demand
This comes as Zimbabwe is poised to reap huge dividends from exporting electric vehicle (EV) batteries lithium, whose demand is expected to soar as demand for battery-powered cars continues to grow.
Demand will be driven by rapid expansion in the lithium-ion battery industry, as world demand for hybrid and electric vehicles, energy storage systems, and high-drain portable electronics continues to grow.
Lithium mines in Zimbabwe
Despite having only a single mine, Zimbabwe is the world’s fifth largest lithium producer and Government has designated the mineral as one of the minerals expected to drive economic growth in short to medium term.
Other lithium projects in the country include Bikita Minerals (already in production), Jimbata’s Kamativi lithium project and the Zulu Lithium project near Gwanda, which are now at different stages of development.
