HARARE – A London domiciled financier has sealed a US$200 million deal to fund lithium mining at one of Zimbabwe’s four producers, ENN can report.
There have been huge finds in the southern African country, which have attracted global attention, with the Australian listed Prospect Resources, Bikita Minerals, Zulu Lithium and Zimbabwe Lithium moving swiftly to position themselves to become huge sources of a mineral whose demand has been ignited by a spike in demand for battery fired automobiles.
The four are at various stages of developing their assets, which require a combined US$300 million to get them to full production, according to figures produced by the Lithium Producers Association in Zimbabwe.
Per Wimmer, a former Goldman Sachs executive and founder of Wimmer Financial LLP, a corporate advisory firm headquartered in London, played his cards close to his chest when pressed to disclose which mine was due to receive the windfall, only hinting that it was in Zimbabwe.
However, the US$200 million deal will significantly close the funding gap for lithium mining in Zimbabwe and position the country on the path to full scale extraction.
“We see investment opportunities across Africa in mining, oil and gas, green energy as well as real estate. We are currently doing a deal in the lithium space. Lithium is what you need for batteries and electric cars,” he told African Business.
“As a result of that we are currently doing a US$200 million deal with a lithium mine in Africa, so it very much plays into that theme for near-term production. This plant is in Zimbabwe,” Wimmer said.
Arcadia Lithium. Investors in Zimbabwe are at various stages of developing their assets
Asked to explain to logic behind plunging into high risk destinations like Zimbabwe, Wimmer said the advisory firm was fully aware of the problems that confront investors in such jurisdictions.
And there had been a lot of background work before making the decision, he said.
Besides, Zimbabwe is one of the world’s largest hosts of Lithium.
It is difficult to just ignore.
However, while political instability is still a huge issue in Zimbabwe, there has recently been strides towards improving regulatory frameworks.
“We do our own risk appetite assessment and go quite far out with political risk, as is the case with Zimbabwe, which is certainly not the most stable country in Africa. We normally like to call Namibia and Botswana ‘Africa for beginners’ because it is so stable, so boring and so well organised, whereas other countries are not. Having said that, when it comes to the slightly more riskier countries, you can de-risk the financial aspect of doing deals in Africa, for instance through insurance, you can take political risk insurance on certain African countries,” the Wimmer founder noted.
Zimbabwe sees the sharp rise in lithium demand as a good Oman for its economy, which has been looking to its mineral resources to help defuse a blistering economic crisis.
Mineral revenues in Zimbabwe are projected at about US$4 million this year, from about US$3 billion annually in the past five years.
Last week, the CEO Africa Roundtable said lithium represented the future of Zimbabwe’s mining industry and called on the country to come up with a comprehensive policy to benefit from its significant finds.
“The future of this this country is not in diamond, gold or platinum but it is in lithium. We need to create systems that enable us to gain,” CEO Africa said.