ASX-listed African lithium developer Prospect Resources advises that Prospect Lithium Zimbabwe's application for SEZ status has been approved.
Edwin Kondo, the Zimbabwe Special Economic Zones Authority (ZIMSEZA) CEO has greenlighted the application for the Special Economic Zone (SEZ) status as approved by the Zimbabwe Special Economic Zones Authority (ZIMSEZA).
Prospect's flagship asset, the Arcadia lithium project, will fall within the SEZ.
Prospect Resources MD, Sam Hosack, says that “SEZ status at Arcadia is a substantial milestone for the company as it demonstrates the Zimbabwe Government’s commitment to attract foreign investment, the project’s significance within Zimbabwe and the opportunity that Arcadia presents to all stakeholders.”
Hosack continues, “the financial and non-financial benefits to Prospect Resources in achieving SEZ status at Arcadia will greatly assist in the financing, development and operation of the mine.”
Prospect Resources won the Investment Battlefield at this year's Investing in African Mining Indaba. Watch our interview with executive director Harry Greaves HERE
SEZ status at Arcadia provides Prospect with an extensive list of benefits that includes; tax relief and exemptions and the ability to hold and operate foreign currency accounts, as well as exemptions and reductions of costs & trade barriers associated with the import of raw materials and capital goods through to the exportation of the concentrates.
The incentives and benefits to be received from the SEZ status, reinforces the financial outcomes of the project outlined in the Definitive Feasibility Study (DFS).
The SEZ licence is valid for 10 years, with the ability to renew and extend the licence prior to expiry.
A SEZ is an area in a country that has been granted unique regulations and incentives that differ from other areas in the same country.
Zimbabwe has developed SEZ to increase investment in the priority sectors of the economy and to facilitate rapid economic growth, by providing tax and other fiscal incentives to attract foreign direct investment, job creation, value addition, linkages with the domestic economy and skills transfer and technological advancement.
With Arcadia now securing SEZ, Prospect will have greater abilities to hold and transact in foreign currency. This simplifies Prospect’s ability to make payments to and from suppliers and customers, as well as providing potential financiers confidence that Prospect can manage its currency freely to meet its operational and capital management requirements.
Therefore, reinforcing the Zimbabwe Governments pledge to potential financiers that Zimbabwe is “open for business”.
His Excellency, The President, E.D. Mnangagwa recently said at the Arcadia groundbreaking ceremony, “My government has a vision of transforming Zimbabwe to a middle-income economy by 2030 and the mining sector is expected to play a key role. In this regard, we continue to implement comprehensive reforms to enhance our country’s competitiveness in this and other sectors, within the context of regional and global trends.”
The President in his speech then went onto say “Let us move forward full throttle and make this investment venture a great success, in the shortest possible time.”
Prospect Resources will now work with ZIMSEZA on implementation and operationalisation of the SEZ at Arcadia, so that it can start to receive the benefits under SEZ status.