Zim earns US$30m from Arcadia deal

ZIMBABWE is set to reap about US$30 million as capital gains tax from the sale of Arcadia lithium project by Prospect Resources to a Chinese resources outfit, Zhejiang Huayou Cobalt Co (Huayou).

On December 23, 2021, Prospect announced it had executed a binding agreement with Huayou for the sale of its 87% interest in the Arcadia lithium project for approximately US$378 million.

“From the gross sales of A$528m, we estimate the company will need to pay Zimbabwe capital gains tax of approximately US$30m (A$42m), plus US$15m across transaction costs (legal, adviser fees, etc) and a damages fee on breaking its existing offtake agreement,” the research firm said in its note.

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