By Thomas Mupfuka
ASX-listed Prospect Resources Ltd says its Arcadia Lithium project, located outside Harare remains on course, adding that costs pegged in US dollars have not changed.
Prospect Resources general manager corporate affairs Nick Rathjen, who was in the country last week, said the project was not exposed by the current macro-economic challenges that are threatening the survival of the extractive sector, as investors are pouring in US dollars, hence the capital cost for the project would not fluctuate.
“The Arcadia Lithium Project is in a strong position such that we have successfully secured Special Economic Zones (SEZ) status that allows us to trade in foreign currency and hold funds offshore. Our customers receipts (will be in) US dollars, the majority of key pieces of equipment will be purchased in rand, with other costs to be in US dollars. The majority of our operating model is in foreign currency,” he said.
Rathjen said they would be working with the Special Economic Zone Authority to implement these measures, as the project would be financed in US dollars and the capital cost for the project would not fluctuate.
“To provide investors with additional confidence and stability, we are working with the government on a fiscal stability framework to address investors concerns. The currency is affecting our local employees and contractors and we are working with them to achieve a positive outcome for all,” Rathjen told NewsDay.
“We have no plans to shelve our project in Zimbabwe, but we expect to increase our project momentum going forward. As outlined earlier, we are in a strong position that has been developed by the support of the Zimbabwean government. Arcadia Lithium Mine is Africa’s second largest drilled hard rock resource and whatever challenges come our way, it is our belief that in consultation with relevant stakeholders, nothing is insurmountable.”
Commenting on the latest stage of the project, Rathjen said they were currently in the process of securing funding, but would not disclose how much had been secured.
“Prospect Resources is progressing funding with a number of parties. The company is anticipating to complete funding in the near future, in which it will then require 18 months to develop the plant into production,” he said.
“This will be a significant boost to the Zimbabwean economy, as the project was expected to create 1 100 jobs (either directly or through contractors) and signal Zimbabwe as the African leader in lithium.
“We are currently focused with reaching financial closure with the parties we are engaging and listing on the Zimbabwean Stock Exchange is definitely something that the company will explore further in the future and on merit.”
Last year, the lithium miner secured a US$10 million export finance facility from the Reserve Bank of Zimbabwe through CBZ Bank to finance the Arcadia project.