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Oliver Kazunga, Senior Business Reporter

PROSPECT Resources says the initial exclusive period it signed with SC-Sibelco N.V to negotiate and execute a Binding Offtake Agreement for the Arcadia Lithium project in Zimbabwe has lapsed and the parties have given themselves up to September to conclude the negotiations. 

Prospect Resources is presently developing the Arcadia lithium project East of Harare in Goromonzi.

In April this year, Prospect announced that it had signed an agreement with SC-Sibelco N.V (Silbeco), a European-based distribution company for the uptake of its ultra-low iron petalite. If an agreement is not reached by September, the two parties would have to terminate the negotiations. 

“Whilst we are happy with the progress of negotiations, they will not be completed by 1 July 2020. 

“The parties continue to negotiate terms with an expectation that a binding offtake agreement will be executed.

“Either party may terminate the MoU if the parties have not executed a binding offtake agreement by 1 September 2020,” said Prospect in a latest update.

The lithium producer said at the moment, it was not aware of any operating lithium mine in the world that can produce ultra-low iron petalite suitable for the Sibelco’s customers in the glass ceramic industry.

“Shareholders should note that Arcadia is the only JORC (Joint Ore Reserves Committee) compliant deposit in the world that will be able to supply ultra-low iron petalite to these existing customers,” it said.

Early last year, the Zimbabwe Special Economic Zones Authority announced that the Arcadia lithium project was set to attract US$165 million in foreign direct investment with potential to generate an estimated US$3 billion income in the first 12 years of operation.