By Business Reporter – Friday 6 December 2019
HARARE (Mining Index) – GOVERNMENT of Zimbabwe, through the Ministry of Finance and Economic Development of Zimbabwe has exempted lithium producer, Prospect Resources from five percent un-beneficiated lithium export tax for the first five years of operation.
The move is expected to reduce the company’s operating costs per tonne, increase profitability and lift the projects Net Present Value (NPV).
“The development of beneficiation facilities requires time for feasibility studies, mobilisation of resources and construction. In this regard, The Zimbabwean Treasury (department within MFED) has approved the exemption from the export tax of un-beneficiated lithium originating from a new mine for a period of five years from the date of commencement of mining operations.”
The lithium producer recently announced a significant increase in the ore reserve estimate of its 87 percent owned Arcadia Lithium Project in Zimbabwe, which further extends life of mine and a pathway to updated project economics.
Commenting on the move, Prospect Resource’s Managing Director, Sam Hosack, said: “This is further confirmation that the Government of Zimbabwe is supportive of Arcadia and is focused on attracting foreign investment into the country.”
“This incentive will materially lift Arcadia’s project economics and will accelerate payback of project finance.”
“Our previously announced DFS and updates have all applied a 5% tax on un-beneficiated lithium to products sold. Removing the 5% tax for the first 5 years of production will reduce operating costs per tonne, increase profitability and lift the projects Net Present Value (NPV). Further details will be provided in due course.”
Prospect Resources’s flagship project is the Arcadia Lithium Project located on the outskirts of Harare which represents a globally significant hard rock lithium resource and is being rapidly developed by Prospect’s experienced team, focusing on near term production of petalite and spodumene concentrates. ENDS//