The Zimbabwe Special Economic Zones Authority (Zimseza), has granted Prospect Resources’ Arcadia Lithium Project Special Economic Zone (SEZ) status, The Herald Business can reveal.
A SEZ is an area in a country that has been granted unique regulations and incentives that differ from other areas in the same country.
Zimbabwe has developed SEZ to increase investment in the priority sectors of the economy and to facilitate rapid economic growth, by providing tax and other fiscal incentives to attract foreign direct investment, job creation, value addition, linkages with the domestic economy and skills transfer and technological advancement.
And in November last year, Prospect Resources (Prospect) applied for special economic zone status for its multi-million-dollar Arcadia Lithium project near Harare following its commission by President Mnangagwa.
The application has now been approved by Zimseza.
Prospect advised on Thursday in a statement that its 87 percent owned subsidiary, Prospect Lithium Zimbabwe (Pvt) Ltd, “has received notification from Mr Edwin Kondo the Zimbabwe Special Economic Zones Authority (Zimseza) Chief Executive Officer that its application for Special Economic Zone (SEZ) status was successful and has been approved by the Zimbabwe Special Economic Zones Authority (Zimseza) for its flagship asset, the Arcadia Lithium Project (Arcadia, the Project).”
Prospect Resources MD, Sam Hosack, said that the “SEZ status at Arcadia is a substantial milestone for the company as it demonstrates the Zimbabwe Government’s commitment to attract foreign investment, the project’s significance within Zimbabwe and the opportunity that Arcadia presents to all stakeholders.”
Hosack continues; “the financial and non-financial benefits to Prospect Resources in achieving SEZ status at Arcadia will greatly assist in the financing, development and operation of the mine.”
SEZ status at Arcadia provides Prospect with an extensive list of benefits that includes; tax relief and exemptions and the ability to hold and operate foreign currency accounts, as well as exemptions and reductions of costs and trade barriers associated with the import of raw materials and capital goods through to the exportation of the concentrates.
The incentives and benefits to be received from the SEZ status, reinforces the financial outcomes of the Project outlined in the Definitive Feasibility Study (DFS).
With the SEZ status now in place, Prospect will have greater abilities to hold and transact in foreign currency.
This simplifies Prospect’s ability to make payments to and from suppliers and customers, as well as providing potential financiers confidence that Prospect can manage its currency freely to meet its operational and capital management requirements.
Prospect Resources will now work with ZIMSEZA on the implementation and operationalisation of the SEZ at Arcadia, so that the company can start to receive the benefits under SEZ status.
The SEZ licence is valid for 10 years, with the ability to renew and extend the licence prior to expiry.