AUTHORITIES at Zimbabwe’s biggest lithium miner say they are worried over plummeting prices as they make final touches to a US$275 million  processing plant, with exports expected to begin next month.

Trevor Bernard, deputy general manager at Prospect Lithium Zimbabwe (PLZ), said  this week the 4,5 million tonne capacity processing facility will peak to 500 000 tonnes by next year, progressing steadily as the mine  accelerates production.

In the next few weeks, PLZ will be negotiating off take deals with several partners, Bernard told the Zimbabwe Independent, but noted that developments on the international markets were worrisome.

Prospect’s Arcadia mine will become Zimbabwe’s first operation to export the mineral since the rush for lithium exploded about five years ago, underpinned by a surge in demand for electric vehicles (EVs). Several investors have also been exploring for the mineral across the country, and are said preparing investments worth over US$3 billion.

“We are busy with commissioning right now,” Bernard told the Independent, adding that 1 000 Zimbabweans would be on the payroll as mining kicks off.

“We are hoping to be in full production next month. The entire plant has been completed. Construction has been completed for the whole processing plant. There are some finishing work going on, but construction, essentially, has been fully completed.”

But while construction of the plant was progressing, international lithium prices dived, triggering fears that a string of projects underway across the world couild be frozen. Prices have plunged by over half in some markets in the past six months, according to sector data.

“We have seen the lithium carbonate price going from US$80 000 per tonne to around US$30 000 per tonne over four months,” Bernard told the Independent.

“So that is a decrease of over 60% over four months. Suddenly demand for EVs has dropped. To a large extent, that has sent jitters through battery manufacturers, and EV manufacturers. There is a bit of a price war going on at the moment. I know Tesla (EV maker) are dropping their prices because they want to sell and get more market share. From that perspective, we will see that manufacturers are really pushing to lower the prices. Some large battery manufacturers are also dropping their prices for which they sell their batteries through to the EV manufacturers to get rid of their stock because bought that stock high prices.

“We are hoping that the price for lithium carbonate would stabilise at between US$25 000 and US$30 000 per tonne. The total investment, including all of the construction, the commissioning and working capital sits at around US$250 million to US$275 million.”

He said the firm was negotiating offtake agreement, but he was not at liberty to disclose who they were talking to.

“At this stage I can't tell you with whom because we have some negotiations going on with a number of different off takers. But we are expecting that to be finalised in the next few weeks. We are hoping to export in April. Once we reach stable production, we will export around half a million tonnes per year. But you obviously build up to that. We expect in this first year to probably export around 200 000 tonnes to 300 000 tonnes, and then build it up to half a million tonnes going forward,” the Prospect boss noted.

The mine was taken over by Chinese giant, Huayou International Mining in April last year in a US$378 million deal.

Prospect Resources, the exploration firm, has since move to develop One Step Mine not far from Arcadia.

Construction of the plant started in May 2022 and had been completed by February this year, according to Bernard.

“We are proud of this achievement and we hope that it will be in full production by next month,” Bernard said.

“While we are talking about this, the background to the lithium market is just that lithium was one of the best performing commodities over the previous two years specifically. And that was largely driven by demand for EVs. So these electric vehicles are part of the green economy and really a lot some of the larger economies and countries in the world are focusing on getting the electric vehicle industry moving and to do that, some of them even paid subsidies to people for buying electric vehicles so that they don't buy for instance a diesel or a petrol vehicle which pollutes the environment, but they have battery vehicles which doesn't cause any pollution,” he added.

“But now what has happened is we have seen quite a drastic reduction in price for lithium since probably December 2022 to now.”