Zimbabwe Lithium Mine Set for Expansion Despite Tungsten Mine Impasse
Premier African Minerals, a London-listed company, has made significant progress at the Zulu Lithium and Tantalum Project, overcoming obstacles to achieve substantial milestones.
By Patricia Rwafa
Production of saleable spodumene concentrate is underway, with an upcoming upgrade promising even greater efficiency. Confident in meeting ambitious targets, the company aims for a competitive delivery cost for spodumene concentrate to China. Favourable resource estimates indicate a long and productive future at Zulu.
As announced on June 28 in the annual report for the year ended December 2023, high wolframite prices suggest resuming production at the RHA Tungsten Mine could be profitable. However, ongoing discussions about ownership structure with the Zimbabwean government are delaying a decision. To allocate resources for the Zulu project’s expansion, Premier African Minerals might relocate most of the RHA plant by late 2024.
The Zulu Lithium Project overcame initial hurdles in its continuous flotation process and successfully produced saleable spodumene concentrate with a lithium oxide (Li2O) content of up to 6.2%. To further optimize production, an additional conditioning cell will be installed in July 2024, bringing the plant to its designed throughput and enabling the achievement of the original production targets.
The company reports positive developments with a major Chinese miner evaluating their eastern Zimbabwe claims for potential acquisition. While development is on hold due to the focus on Zulu, Premier seeks alternative avenues to unlock the value of its 50% stake in the Turwi Gold Project.
Despite delays at Zulu impacting further development, Premier remains interested in increasing its control in MN Holdings due to the positive outlook for manganese. Financial highlights for MN Holdings’ subsidiary Otjozondu include:
– Revenue of approximately N$76 million ($4.1 million) for the year ended June 30, 2023.
– Operating profit before tax of approximately N$24.1 million ($1.3 million).
– Total assets of approximately N$289 million ($15.6 million) as of June 30, 2023.
While progress has been slow on the Vortex Lithium Project, the company notes an improved situation in Ethiopia. However, frustrations related to cooperative agreements and differing opinions on development continue to hinder progress.
Premier African Minerals raised net proceeds of $17.542 million during the reporting period, up from $14.838 million in 2022.
George Roach, CEO of the Zulu Lithium plant, expressed dissatisfaction with the performance of the original plant and equipment suppliers and intends to seek substantial redress. He acknowledged the support of their offtake and prepayment partner and remains committed to meeting their long-term interests, which focus on the supply of SC6.
The company released updated resource estimates, identifying that the main pegmatite at Zulu is primarily a spodumene-rich ore body. This estimate, coupled with the extent of pegmatites within the EPO, suggests a longer-term life of mine and the potential for increased plant production capacity. An application has been made for the renewal of the EPO, and extensive new mining claims have been registered within the EPO.
Based on internal assessments, the production cost associated with spodumene concentrate supports an internal project of a delivered China port all-in cost of $828 per tonne for the year ending June 2025. The new scrubber unit will be operational by the week of July 10, enabling Zulu to produce and derive revenue from the sale of SC6. The Board believes Zulu is a valuable asset, with an estimated fair value of $200 million by the prepayment and offtake agreement. The group has sufficient share authorities to sustain its reduced holding costs through December 31, 2025.