Chinese Firm becomes Arcadia Lithium’s project major shareholder

21 Jan, 2022 - 00:01 0 Views
Chinese Firm becomes Arcadia  Lithium’s project major shareholder

The Chronicle

Oliver Kazunga, Senior Business Reporter
A CHINESE firm, Huayou International, has secured approval to be the major shareholder in the Arcadia Lithium project, a development which keeps alive the hope that the transaction would be closed within the targeted timeframe.

All conditions precedent to the sale being met, it is envisaged that the transaction would be completed by the first quarter or early into the second quarter this year.

If completed within the projected timeframe, this would also mean the Huayou, which is the world’s biggest producer of another battery metal, cobalt will hit the ground running developing the Arcadia Lithium project, which adds impetus to the Government’s US$12 billion mining industry strategy.

Under the US$12 billion milestone, by 2023 lithium is expected to contribute US$500 million while the contribution from other minerals such as gold will be US$4 billion, platinum (US$3 billion), diamond (US$1 billion), coal (US$1 billion), chrome, ferrochrome and carbon steel (US$1 billion) and US$1,5 billion from other minerals.

Last month, Prospect Resources announced that it had sold for US$377,8 million, in upfront cash consideration, its 87 percent shareholding in Prospect Lithium Zimbabwe (Pvt) Limited (PLZ), which owns the Arcadia Lithium project in Goromonzi near Harare.

In a trading update released this week, Prospect Resources said Huayou International Mining has secured an outbound investment certificate to facilitate the completion of the transaction.

“Huayou has notified Prospect that it has obtained the outbound investment certificate for the transaction from the Ministry of Commerce of the People’s Republic of China (MOFCOM) required for completion of the transaction.

“Application for filing and registration by the National Development and Reform Commission (NDRC) has been submitted by Huayou.

“Once completing the filing and registration by NDRC, Huayou will apply for the relevant exchange registrations from a qualified bank supervised by the State Administration of Foreign Exchange (SAFE) and these confirmations are expected to be received in due course,” said Prospect.

The acquisition of Arcadia Lithium Mine by Huayou demonstrates the potential of the project can be fully developed to contribute to the gross domestic product through employment creation and export revenues, thus placing Zimbabwe firm in the electric vehicles supply chain.

Lithium is widely regarded as the “new gold” that could propel producing countries to assuming the status accorded to the Middle East over its petroleum riches.

This is on account of the fact that the world is drifting towards exclusive use of lithium-ion powered electric vehicles.

—@KazungaOliver

Share This: