By Business Reporter – Friday 1 March 2019
HARARE (Mining Index) – GOVERNMENT has granted a 10 year Special Economic Zone (SEZ) status to Prospect Resources’ lithium project, with the licence open for renewal and extension prior to expiry.
“Prospect Lithium Zimbabwe (Pvt) Ltd, has received notification from Mr. Edwin Kondo the Zimbabwe Special Economic Zones Authority (ZIMSEZA) Chief Executive Officer that its application for Special Economic Zone (SEZ) status was successful and has been approved by the Zimbabwe Special Economic Zones Authority (ZIMSEZA) for its flagship asset, the Arcadia Lithium Project (Arcadia, the Project).”
Prospect Resources Limited (ASX:PSC) is an Africa-focused, lithium and battery minerals company based in Perth with operations in Zimbabwe including exploration activities in Zimbabwe and DRC.
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.
Prospect Resources will now work with ZIMSEZA on implementation and operationalization of the SEZ at Arcadia, so as to start receiving SEZ status benefits that include tax relief and exemptions, ability to hold and operate foreign currency accounts, as well as exemptions and reductions of costs and trade barriers associated with the import of raw materials and capital goods through to the exportation of the concentrates.
Such incentives and benefits to be received from the SEZ status, reinforces the financial outcomes of the Project outlined in the Definitive Feasibility Study (DFS).
“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,” said Prospect Resources Managing Director, Sam Hosack.
Mr Hosack added that “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 is now poised for greater abilities to hold and transact in foreign currency, simplifying the company’s ability to make payments to and from suppliers and customers, while providing potential financiers confidence to manage its currency freely to meet its operational and capital management requirements, reinforcing government’s pledge to potential financiers that Zimbabwe is open for business. ENDS//