• Prospect Resources has sold its Step Aside Lithium Project in Zimbabwe for up to US$2.2 million, marking its full exit from the country’s lithium sector
  • The company will redirect proceeds to its Mumbezhi Copper Project in Zambia
  • The move underscores Prospect’s pivot to metals with stronger long-term demand, as copper remains central to electrification and global energy transition infrastructure

Harare - Prospect Resources Limited, the Australia (ASX)-listed battery minerals explorer, has signed an agreement to sell its Step Aside Lithium Project in Zimbabwe for up to US$2.2 million, marking its latest strategic pivot away from lithium and into copper exploration in Zambia, according to the company’s latest circular.

The sale will see Prospect divest its wholly owned Singapore-based subsidiary, Promin Resources Holdings, which holds a 90% interest in Step Aside. Under the agreement, the buyer, Fatima Resources (Pvt) Ltd, will pay US$850,000 upfront, followed by a contingent payment of up to US$1.2 million over the next two years, subject to the project meeting certain development milestones.

Prospect said the funds will be redirected toward accelerating drilling, resource growth, and project development at its Mumbezhi Copper Project in northern Zambia, where the company sees a more favourable long-term commodity outlook.

“We remain focused on delivering further resource growth and expanding the project’s regional footprint at Mumbezhi,” Managing Director Sam Hosack said.

This transaction effectively brings to a close Prospect’s nearly decade-long involvement in Zimbabwe’s lithium sector. The company was an early mover into the battery minerals rush, acquiring the Arcadia Lithium Project near Harare in 2016.

Arcadia became one of Zimbabwe’s most advanced lithium developments and a landmark deal story when Prospect sold its 87% stake to China’s Huayou Cobalt in 2022 for approximately US$378 million, after investing around US$26 million in exploration and evaluation work.

Step Aside, located just 8km from Arcadia in Goromonzi, was initially viewed as Prospect’s next development pipeline asset. Drilling between 2022 and 2024 confirmed spodumene-bearing lithium zones, and early geological data suggested potential scale.

However, the global lithium market has cooled significantly since its price peaks of 2021–2022. During the electric vehicle (EV) surge, lithium prices soared to record highs as automakers and governments accelerated electrification targets.

From late 2023 onwards, a combination of rapid supply growth from Australia, China and South America, slower EV sales in Europe, and stockpiling by battery manufacturers triggered a sharp correction. Lithium spodumene prices fell substantially, compressing margins and making early-stage exploration less financially compelling.

As capital became more selective, investors favoured near-production or producing assets, making it more difficult for juniors like Prospect to secure the funding needed for drilling and feasibility advancement.

This challenging backdrop has seen many early-stage lithium explorers diversify into metals with more stable long-term demand profiles  particularly copper.

The Step Aside sale therefore highlights Prospect’s strategic transition toward copper  a metal viewed as central to the global energy transition. Copper is indispensable in electric vehicles and charging infrastructure, large-scale transmission networks required for renewable power distribution, solar and wind energy systems, and global data infrastructure expansion.

The world is heading into a period of structural copper demand growth, while supply additions remain constrained by declining ore grades, long permitting timelines, and underinvestment in new mines over the past decade.

Prospect is currently advancing Phase Two drilling at its Mumbezhi Copper Project in Zambia’s North-Western Province, where an updated resource estimate is expected later this year. If resource scale and grade continue to improve, Mumbezhi could become a key value catalyst for the company.

While copper’s multi-year outlook remains robust driven by electrification and grid expansion the metal will continue to experience cyclical price corrections, particularly in periods of global economic slowdown or when industrial activity weakens in China, which consumes over 50% of global copper output.

If copper prices retreat sharply again, well-capitalised developers with high-grade deposits will likely weather the downturn, though junior explorers may face financing challenges similar to what lithium juniors experienced post 2023.

The strategic advantage for Prospect, however, lies in positioning itself early in a region with proven copper endowment, scale and grade improvements at Mumbezhi could allow the company to retain investor interest even through price cycles.

Meanwhile, Zimbabwe’s lithium sector has entered a more mature phase following the wave of Chinese investment between 2021 and 2023. While major operations such as Arcadia, Sabi Star and Bikita are advancing, smaller exploration-stage assets are increasingly being taken over by local operators or companies accustomed to longer development horizons and lower operating overheads.

Provided Mumbezhi’s resource potential continues to expand, Prospect could once again position itself to crystallise value  this time in copper rather than lithium.

 Equity Axis News