ASX-listed African lithium developer Prospect Resources has signed a memorandum of understanding with African Continental Minerals for the supply of power to the Arcadia lithium project in Zimbabwe.
Zimbabwe – The non-binding MOU with African Continental Minerals (ACM) provides Prospect Resources with power supply optionality for the project whilst also generating opportunities for additional services/projects, such as ACM’s coal bed methane gas-to-power project, to be developed.
The MOU sets out the key terms for a subsequent formal offtake agreement as the Arcadia lithium project is developed. These key terms include:
- An agreed term of five years from the commencement date (to be outlined in a definitive agreement);
- Minimum supply of 20 MW daily power to meet all of Arcadia’s power supply requirements (Arcadia’s peak power requirement is 16 MW); and
- Option for an additional 25 MW of supply in the event of further expansion of the facility or downstream processing (lithium carbonate or hydroxide plant).
ACM currently holds two Special Grants containing a total 245 000 ha and is awaiting the final approvals on a third asset. All assets are covered by existing power lines ranging from 11 kV to 33 kV. Drilling test and production wells will be placed within 4 to 8 km from power distribution lines.
ACM possesses the vital technical industry experience to deliver a purpose-built power solution for Prospect Resources.
ACM’s parent entity, Jacqueline Resources, has established a team of experienced experts on the ground in Zimbabwe headed by Troy Wilson, a widely recognised coalbed methane (CBM) expert, with over 20 years’ experience across exploration through to production.
Moreover, Jacqueline Resources’ team possess global experience across de-gassings to energy projects in coal mining such as converting CBM gas to power, as well as coal seam gas projects.
Arcadia’s primary source of power supply is from the national electricity grid that is owned and operated by Zimbabwe Electricity Transmission & Distribution Company (ZETDC),whose main power distribution lines runs adjacent to Arcadia, some 15 km away.
Prospect Resources has secured Arcadia’s required supply at this interconnection but the MoU provides Arcadia with optionality for power supply and competitive tension for future supply agreements.
Alternative secondary power options
In addition to the signing of the MoU, Prospect Resources continues to consider alternative secondary power supply options including purchase of power from the South African Power Pool, a power purchase agreement with the existing Cahora Bassa hydroelectric scheme or even the creation of a solar farm on site to ensure that it has the appropriate power solution with contingencies to support the development and operations of the Arcadia mine.
“The development of Arcadia creates opportunities for other investment and projects to either directly or indirectly benefit from the project’s operations,” says MD Sam Hosack.
“Prospect is creating an ecosystem anchored by the Arcadia mine. This positive multiplier effect will boost investment in Zimbabwe and deliver a raft of benefits to the economy and the community,” he adds.
The company looks forward to supporting additional power projects in the future.