Chinese firm secures approval to be majority shareholder in Zimbabwe’s lithium project

By Stanley James Business Editor

CHINESE firm Huayou International has secured approval to buy majority shares from Prospect Resources raising hopes of fresh capital for Zimbabwe’s Arcadia Lithium Project.

A trading update released this Tuesday by Prospect Resources, indicates the Chinese entity has secured an outbound investment certificate for completing the transaction.

According to the update, the next step is for the Chinese firm to apply for exchange registration or approvals from a government supervised bank in China.

The deal is expected to result in the Chinese entity becoming the majority shareholder through purchasing a stake worth over US$400 million from current owners Prospect Resources.

With the two parties having signed the agreement last month, it is the pace of the transaction that has raised hopes for the lithium mining project.

Investment analyst Makanaka Shambare said: “It is a project that if fully consummated may have the right path for the mobilisation of capital and relevant resources to ensure sustainability of the entire project, so, let’s wait and see what the future holds for the deal.”

“The pace so far is really quite good and we anticipate further growth in the future provided both parties agree to the entire transaction,” Institute of Mining Research Chairman, Dr. Lyman Mlambo noted.

The Shanghai Stock Exchange-listed Chinese firm is the world’s biggest producer of cobalt owning business portfolios in several countries.

In a related development, Prospect Resources shareholders are expected to meet soon to consider approving the deal.