Shanghai-listed mining company Zhejiang Huayou Cobalt, controlled by billionaire Chen Xuehua, will invest $300 million in its Arcadia lithium mine near Harare, Zimbabwe, according to a Reuters report, citing company documents.
Prospect Lithium Zimbabwe, the holding company for the Arcadia project, will use the investment to rapidly expand the lithium mine and build a plant with a processing capacity of 4.5 million tonnes of ore and a production capacity of 400, 00 tons of lithium concentrate per year.
During the construction period, Prospect Lithium Zimbabwe will employ 600 local workers, which will increase to 900 once production begins. The Arcadia project is expected to begin delivery of its first production batch next year.
Prosper Chitambara, Senior Research Economist at the Zimbabwe Labor and Economic Development Research Institute, said investment is an important development for Zimbabwe with significant multiplier effects including job creation, contribution to tax revenue and generation of foreign currency through exports.
“The investment also has a strong industrialization element with the planned establishment of a processing plant which will ensure that the country maximizes value retention,” Chitambara said.
Huayou Cobalt completed the acquisition of Arcadia in April 2022 from australia Prospect Resources and Zimbabwean minority shareholders for $422 million. From October 2021the Arcadia project had 15.8 million tonnes of measured lithium resources and 11.8 million tonnes of proven lithium reserves.
Chinese miners have recently targeted Zimbabwe’s lithium mines, which hold great promise given that most of the country’s lithium reserves are still unexplored and it holds the largest reserves in Africa. Over the past seven months, Shenzhen Chengxin Lithium Group and Sinomine Resource Group has also invested in lithium mines in Zimbabwe.
Growing demand for environmentally friendly transportation is driving sales of electric vehicles (EVs) and the lithium-ion batteries that power them. According to a recent report from Research and Markets, company analysts say lithium-ion battery market revenue will reach $165.8 billion by 2030, growing at a compound annual growth rate of 15.3%.
Besides electric vehicles, another key reason for the growing use of lithium-ion batteries is the growth in renewable energy generation, the company said in the report. Lithium-ion batteries are now used in everything from portable devices to network-attached storage.
Huayou Cobalt has also sought to expand closer to home by investing in Indonesia to secure more sources of other raw materials used to produce electric vehicle batteries. Last April, it signed a cooperation framework agreement with the Indonesia-listed nickel company Indonesia for the development of a High Pressure Acid Leach (HPAL) treatment facility in Pomalaa, South Sulawesi, for an undisclosed price. The agreement obliges Huayou Cobalt to build the Pomalaa HPAL project, after which Vale Indonesia will have the right to acquire up to 30% of the shares.
The Pomalaa HPAL project will process limonite ore and low-grade saprolite ore from Vale Indonesia’s Pomalaa mine and produce a mixed hydroxide precipitate with a production capacity of up to 120,000 metric tonnes of nickel per year, which will be used in the batteries of electric vehicles.
Vale Indonesia Chief Financial Officer Bernardus Irmanto told Forbes Asia that Huayou Cobalt prepare studies related to, among others, power supply, water supply and tailings treatment process, which will be held within six months. The construction of the HPAL project will begin at the end of this year and should be completed within three years.
“We expect to benefit from the rapid development of the Pomalaa project as Huayou will make the initial investment,” Bernardus said.