Premier confident of Zulu lithium profitability

MINING and natural resource development company, Premier African Minerals chief executive officer, Mr George Roach, says due to projected production of concentrate levels at the lithium plant in Fort Rixon, the firm expects to operate profitably, taking advantage of favourable concentrate prices.

The lithium firm recently began production in Insiza District, Matabeleland South, effectively setting the tone for its first concentrate production, which is a major development in the country’s mining sector.

The firm looks forward to the first shipment of spodumene in June. Spodumene is a battery-grade product, which is key for the future of electric cars.

Chief executive officer, Mr George Roach

Due to the emerging electric motor vehicle industry, there is increased international demand for the lithium mineral known as “white oil”, which is used for manufacturing batteries.

Zimbabwe has the largest lithium reserves in Africa and the fifth-largest worldwide. In an update on Thursday, Mr Roach said the process plant is fully commissioned and capable of producing concentrate.

He indicated that the plant supplier has advised that the milling and sizing component of the plant requires certain limited modifications to allow for full optimisation to design capacity throughput.

“The plant supplier has provided details and timelines for this remedial action and pending completion of this work, has advised that expected production of concentrate to 30 June 2023 will be 1,376 tons and production for July and August will be 1,137 tons per month, increasing to 2,359 tons in September, 3,577 tons in October 2023 and 4,471 tons from 1 December 2023,” he said.

“At present concentrate prices and production at these current levels to the end of August, the company expects Zulu to operate profitably.”

According to the update, the modifications include the upgrade of screening, relocation of the mill and addition of cyclones to remove correctly sized material to the floatation plant.

“Premier understands that the costs associated with this remedial action will be met by the plant supplier, and we will work with them to ensure that the plant achieves nameplate throughput expeditiously,” said Mr Roach.

Meanwhile, the CEO said based on the March 29, update, Premier’s requirements to supply spodumene to Canmax Technologies Co., Ltd. (“Canmax”) are to ship first product by May 30, 2023 (which will not now be met), failing which CanMax may elect to cancel the Marketing and Pre-Payment Agreement and require that the prepayment plus interest is settled within 90 days following notice.

He said Canmax has always been supportive of Premier, and they continue to engage with them and look forward to first shipment in June.

“While frustrated with the timeline for putting the plant into full production, I am encouraged by our growing confidence in our resource and mining operations, near completion of our dam and tailings facility, performance of the crushing, sorting, and floatation elements of the plant,” said Mr Roach.

“The company has previously advised that the delays had caused our cash to be constrained. Recent exercise of options and the issue of remaining shares free from pre-emptive rights by way of direct placement, has provided interim relief to this position.

“Alternative further funding may need to be sought if there are any further significant shipment delays,” he noted

Recently, the entity was in the market seeking to raise £1 759 500 to assist with further operational funding of the ongoing optimisation operations and general working capital purposes necessary for the group.

Early this year, the chairman Canmax Technologies Co., Ltd Mr Pei Zenzhue who injected US$35 million pre-funding to enable the construction and commissioning of a large-scale pilot plant at the project had his first visit to the site and expressed his satisfaction with the progress we are making.

Zimbabwe is envisioning a US$12 billion mining industry, which is a key enabler of Vision 2030 of achieving an upper-middle-income economy by 2030.

Lithium has already proved its position as a strategic mineral given its role in the storage, use and transfer of energy, which has touched the globe through use of smartphones for global communication, laptops, electric grid stability, and storage to power homes, and electric vehicles.-chronicles