According to a Reuters report citing documents, Zhejiang Huayou Cobalt a Shanghai-listed mining company is expected to invest $300 million in its Arcadia lithium mine near Harare, Zimbabwe.
Prospect Lithium Zimbabwe, the holding company for the Arcadia project, will use the investment to quickly develop the lithium mine and build a plant with a processing capability of 4.5million tonnes of ore and a capacity of 400,00 tonnes per year of lithium concentrate.
Prospect Lithium Zimbabwe will hire 600 local workers during construction. This number will increase to 900 once production starts. Next year, Arcadia’s first batch of production is expected to be delivered.
Prosper Chitambara is a senior economist at the Labour and Economic Development Research Institute of Zimbabwe. He believes that the investment will have significant multiplier effects, including creating jobs, contributing to fiscal revenue, and the generation of foreign currency through exports.
Chitambara stated that “the investment also has strong industrialization elements with the planned setting-up of a processing facility which will ensure that the country maximizes its value retention.”
Huayou Cobalt purchased Arcadia from Australia-listed Prospect Resources and Zimbabwean minority shareholders for $422 million. October 2021, Arcadia had 15.8 million tonnes of lithium resources and 11.8million tonnes of proven reserves.
Chinese miners are now targeting Zimbabwe’s lithium mines. The country has the largest lithium reserves in Africa and is considered the most promising. In the last seven months, Shenzhen Chengxin Lithium Group and Sinomine Resource Group invested in Zimbabwe’s lithium mines.
Rising demand for eco-friendly transport drives sales of electric cars (EVs) and lithium-ion battery packs that power them. Research and Markets show that lithium-ion battery market revenue will exceed $165.8 million by 2030. This is based on a 15.3% compound annual growth rate.
According to the report, EVs are not the only reason lithium-ion batteries have been used more frequently. The growth in renewable energy production is another major factor. The battery is used in everything, from mobile devices to grid storage.
Huayou Cobalt wants to grow closer to its home country by investing in Indonesia to obtain more raw materials for EV batteries. Last April, it signed a framework agreement with Indonesia-listed nickel company Vale Indonesia to develop a high-pressure acid leaching (HPAL) processing facility in Pomalaa. The price was not disclosed. Huayou Cobalt will build Pomalaa’s HPAL project, and Vale Indonesia can acquire 30%.
Pomalaa HPAL will process the limonite and low-grade Saprolite ores from Vale Indonesia’s mine at Pomalaa. It will also produce mixed hydroxide precipitate, with up to 120,000 tonnes of nickel production capability per year. This will be used for EV batteries.
Bernardus Irmanto (Vale Indonesia’s chief financial officer) stated to Forbes Asia that Huayou Cobalt was working on studies regarding, among other things, power supply, water supply, and tailing process. These studies will be completed within six months. Construction of the HPAL project is expected to begin in the second half of the year and be completed within three years.
Bernardus stated that “we expect to benefit from the rapid development of Pomalaa’s project, as Huayou will make the initial investment.”