Prospect, ACM sign power supply deal
AUSTRALIAN-listed mining group, Prospect Resources, has signed a power agreement with African Continental Minerals (ACM) for the supply of up to 20MW of electricity to its Arcadia lithium project, which is undergoing development.
In a statement, Prospect, whose lithium project is located on the outskirts of Harare, said: “In line with Prospect’s focus to develop the Arcadia lithium project, the agreement provides Prospect with power supply optionality for the project while also generating opportunities for additional services/projects, such as ACM’s coal-bed methane gas to power project, to be developed”.
The Memorandum of Understanding by the two companies is non-binding and sets out the key terms for subsequent formal off take agreement as the Arcadia Lithium project is developed.
Prospect said the MoU’s key terms include an agreed term of five years from the commencement date (to be outlined in a definitive agreement) and minimum supply of 20 megawatts daily power to meet all of Arcadia’s power supply requirements (Arcadia’s peak power requirement is 16MW). Part of the agreement also provides an option for an additional 25MW of supply in the event of further expansion of the facility or downstream processing (Lithium Carbonate or Hydroxide plant).
At present, Premier said ACM holds two Special Grants containing a total 245 000 hectares and is awaiting the final approvals on a third asset.
“All assets are covered by existing power lines ranging from 11kilovolts to 33kV. Drilling test and production wells will be placed within four to eight kilometres from power distribution lines. ACM possesses the vital technical industry experience to deliver a purpose-built power solution for Prospect,” said Premier.
It said ACM’s parent entity, Jacqueline Resources, has established a team of experienced experts on the ground in Zimbabwe headed by Mr Troy Wilson, a widely recognised coal-bed methane (“CBM”) expert, with over 20 years’ experience across exploration through to production.
“Jacqueline Resources’ team possesses global experience across de-gassings to energy projects in coal mining such as converting CBM gas to power, as well as Coal Seam Gas (“CSG”) projects.
“Arcadia’s primary source of power supply is from the national electricity grid that is owned and operated by Zimbabwe Electricity Transmission and Distribution Company whose main power distribution lines runs adjacent to Arcadia, some 15km away.
“Prospect has secured Arcadia’s required supply at this interconnection.”
The MoU provides Arcadia with optionality for power supply and competitive tension for future supply agreements. In addition to the signing of the MoU, Prospect continues to consider alternative secondary power supply options including purchase of power from the Southern African Power Pool, a power purchase agreement with the existing Cahora Bassa Hydroelectric scheme or even the creation of a solar farm on site to ensure appropriate power solution with contingencies to support the development and operations of the Arcadia mine.
The mining group looks forward to supporting additional power projects in the future. Its managing director Mr Sam Hosack was quoted as saying:
“The development of Arcadia creates opportunities for other investment and projects to either directly or indirectly benefit from the Project’s operations. Prospect is creating an ecosystem anchored by the Arcadia Mine.
“This positive multiplier effect will boost investment in Zimbabwe and deliver a raft of benefits to the economy and the community”_The Chronicle