Australia’s battery minerals company Prospect Resources has closed the sale of its 87% interest in the Arcadia project in Zimbabwe, to a subsidiary of China’s Zhejiang Huayou Cobalt, for $377.8m.

Prospect received $342.9m in proceeds on the closure of the deal after the payment of $26.8m in Zimbabwean capital gains taxes, and $8m to Sinomine for the termination of the offtake agreement between Prospect and Sinomine.

Prospect managing director and CEO Sam Hosack said: “Huayou’s pedigree as a leading electric vehicle battery precursor producer opens up opportunities in Zimbabwe and supports our strategy both in Zimbabwe and the broader sub-Saharan region.

“The transaction, being the culmination of years of effort progressing and developing the Arcadia Project to this point is a testament to the skills and expertise of the Prospect team, who are now firmly focussed on the path ahead, to build the next iteration of Prospect, a developer of lithium and battery and electrification metals projects.”

Prospect plans to distribute a considerable portion of the proceeds raised from the stake sale to its shareholders.

Furthermore, the firm plans to fund between $22.2m (A$30m) and $29.7m (A$40m) for battery and electrification metals projects with a primary focus on Zimbabwe, and secondary on the sub-Saharan African region.

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In December 2021, Zhejiang agreed to purchase a 100% stake in the Arcadia hard-rock lithium mine in Zimbabwe from Prospect Lithium Zimbabwe.

Located near Harare, the Arcadia project is considered one of the world’s biggest hard rock lithium resources.