Premier to review production projections
MINING and natural resource development company Premier African Minerals is set to review production projections at its lithium Fort Rixon plant which is undergoing modifications as the plant supplier, Stark International Projects Limited has not been able to deliver spodumene concentrate as expected.
This comes as the Premier African Minerals is engaged in “friendly negotiations” with Chinese investor Canmax Technologies aimed at resolving a contractual misunderstanding.
The talks have been described as extensive and candid with both parties’ intentions said to be “aligned” towards ironing out the dispute amicably.
Last year, Canmax provided US$35 million in pre-funding to enable the construction and commissioning of a large-scale pilot plant. Its chairman Mr Pei Zenzhue had his first visit to the site early this year.
In June this year, the mining entity issued a force majeure to Canmax Technologies citing unforeseen operational hurdles encountered at its Zulu Lithium plant in Fort Rixon, Matabeleland South province.
Premier African minerals lithium plant
Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance is beyond the control of the parties.
That led to Canmax notifying Premier of its intention to terminate the agreement demanding repayment amount of US$35 million within 90 days.
This meant that it could not supply spodumene concentrate to Canmax as per the timelines stipulated in the offtake agreement.
In an offtake and prepayment agreement update on Monday, Premier African Minerals said its board is pleased to report that the “friendly negotiations” with Canmax which remain ongoing, are at an advanced stage and have been constructive.
The board’s expectation is that there is a common understanding between the parties and they are close to a satisfactory resolution.
“Shareholders should note that as Canmax is interested in more than 10 percent of the issued ordinary share capital of the company, any addendum to the agreement will be a related party transaction for the purposes of Rule 13 of the AIM Rules and will be dealt with in accordance with AIM Rule 13,” said the mining house.
Premier African Minerals chief executive officer, Mr George Roach said, “I am deeply appreciative to our team at Premier and the team from Canmax for the work being undertaken in an effort to find a satisfactory outcome.
“In regard to spodumene concentrate production, it is most encouraging to note that we are able to produce high grade spodumene concentrates from the plant material in our laboratory and to note that we expect to re-float concentrates produced to date with the intention of having saleable material in the coming weeks.”
On modification update, the mining entity said the plant has demonstrated its ability to produce concentrates from both the mica and spodumene sections of the floatation plant.
“Whilst certain of the required fixes as set out in the announcement dated 26 May 2023 and in the annual financial statements published at the end of June 2023 have been installed, optimisation and full commissioning has not yet been concluded and the plant supplier, Stark International Projects Limited (“Stark”) has not been able to deliver spodumene concentrate as expected and production projections will need to be reviewed.
The plant has demonstrated its ability to produce concentrates from both the mica and spodumene sections of the floatation plant,” reads part of the update.
Zulu Lithium in Fort Rixon
The ongoing optimisation focus on increasing in density of material provided to the floatation plant and refinement of the spodumene concentrate to eliminate mica and lepidolite minerals.
Spodumene concentrates produced to date contain in the region of 50 percent spodumene as determined by X-ray diffraction analysis, but also up to 30 percent mica minerals that cause a dilution of the spodumene grade.
The firm said with improvements through ongoing optimisation and a refloating of concentrates produced to date, it expect that the plant will produce spodumene to SC6 grade as we have already demonstrated in our on-site laboratory.
Spodumene is a battery-grade product, which is key for the future of electric cars.
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.-chronicle.c.zw
