Online Reporter
Business Reporter
PREMIER Africa Minerals, which owns the Zulu lithium and tantalum project, requires about US$1,6 million for various activities, including part payment to the Government on deferred value added tax (VAT) and other statutory requirements of US$250 000.
The United Kingdom-headquartered mining concern is on the market to raise £2,3 million (equivalent to US$2,8 million) before expenses through a retail offer and £1,2 million (equivalent to US$1,46 million) through a placement of ordinary shares.
Net proceeds from the above fundraise are also intended for the procurement of a secondary floatation plant at Zulu and part payment of salary arrears.
Premier, whose Zulu lithium and tantalum project could have started operations last year, has faced unforeseen operational challenges, negatively impacting on spodumene production.In an update released last week, Premier said: “The net proceeds of the fundraising are intended to be applied as follows: completion of the three-to-five-day floatation plant test run and purchase and commissioning of the secondary floatation plant — the estimated cost is US$800 000 inclusive of the purchase of the spodumene float plant; part payment to the Government of Zimbabwe in respect of deferred VAT and other statutory requirements of US$250 000; and part payment in respect of arrears of salaries and wages to employees of US$400 000.”
Part payment to specific suppliers of plant spares and maintenance amounts to US$180 000.“Any remaining balance will be used in part payments to contractors and other creditors to enable ongoing commercial operations,” said Premier.
The mining sector is one of Zimbabwe’s major economic centrepieces currently contributing 70 percent to foreign direct investment (FDI), 80 percent to exports,19 percent to Government revenues, 3 percent to direct formal employment and 13,5 percent to national income.
Due to the ongoing expansion projects, the number of formal jobs in the mining industry is anticipated to increase by close to 3 percent this year to 58 700 from 57 000 at present.
More so, it is anticipated that mineral revenue for 2025 will increase by almost 10 percent to an estimated US$6 billion from about US$5,5 billion this year.
The growth trajectory in mineral revenue is on account of the envisaged improved output and anticipated commodity price recovery on some minerals this year.
In recent years, global prices of metal, except gold, have remained subdued. This has ultimately impacted adversely on the production of platinum group metals (PGMs), as well as lithium, not only in Zimbabwe, but the world over.The global demand for gold has been on the rise as the world was turning to the yellow metal as a safe haven asset amid economic and geopolitical issues.In the lithium sub-sector, global prices have plummeted from US$80 000 per tonne in 2022 to under US$20 000 last year.
This has largely been attributed to the lithium glut, and rising interest rates have affected demand for electric vehicles.
With the largest lithium deposits in Africa and ranking seventh in production in the world, Zimbabwe continues to ramp up production amid growing demand for the mineral.So far, active producers in the country include Prospect Lithium Resources, Bikita Minerals and Sabi Star.
The rise in demand for lithium and battery minerals is due to the global growth of green energy industries that are involved in the manufacture of electric vehicles and energy storage devices, among other items.
Capacity utilisation in the local mining industry is expected to reach an average of 90 percent this year from 84 percent in 2024, driven by key sub-sectors such as gold, ferrochrome, and PGMs.
