Chronicle Editor
Oliver Kazunga, Senior Business Reporter
ZIMBABWE-focused mining group, Prospect Resources, has secured a long-term agreement with Sibelco N.V, the world’s largest industrial minerals solutions company to supply petalite from its Arcadia Lithium project.
Prospect is developing the Arcadia Lithium mining project in Goromonzi near Harare. In a statement, the mining group said the seven-year agreement will see the company supplying 700 000 dry metric tonnes (dmt) of high quality, ultra-low iron petalite concentrate during the tenure of the agreement.
“The company is pleased to announce that it has secured a new long-term offtake partner for its Arcadia Lithium Project.
“Following on from the Memorandum of Understanding announced on the 15th April 2020, Prospect has now entered into an offtake agreement with Sibelco N.V, a global leader in industrial minerals,” said the mining group.
The seven-year agreement is for up to 100 000dmt per annum of high quality, ultra-low iron petalite concentrate while the pricing formula for the agreement is linked to the end customer sales contracts with minimum pricing provisions.
The mining concern said 100 percent of its 2019 Definitive Feasibility Study petalite production for the first seven years was now covered by offtake agreements.
Prospect managing director Mr Sam Hosack was quoted expressing pleasure over their deal with Sibelco N V.
“I am pleased to announce that we have signed an offtake agreement with Sibelco for Arcadia’s premium ultra-low iron petalite.
“Sibelco is the largest distributor of ultra-low iron petalite in Europe and possibly the world and we believe that this is the largest ultra-low iron petalite offtake agreement ever signed,” he said.
“Sibelco is a global industrial minerals business, with annual turnover of some €3,5 billion. Once in production, Prospect is expected to be the largest ultra-low iron petalite producer in the world.”
As part of the offtake agreement the parties will annually agree binding delivery quantities, pricing and end-customer contract terms for the following year. Parties will also share end-customer sales receipts in agreed proportions after recovery of their respective costs. In addition, Prospect may terminate the contract if Sibelco does not purchase at least 10 000 tonnes of the product in each of two successive quarters for any reason other than that the global market price for petalite is below an agreed price level.
On the other hand, Sibelco may terminate the contract if Prospect does not meet the agreed production levels of product for two successive quarters. The Arcadia Lithium project represents a globally significant hard rock lithium resource and is being rapidly developed by Prospect, focusing on near term production of petalite and spodumene concentrates. — @okazunga
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