Published: 08 May 2025

Premier African Minerals is betting on a potential supply agreement with global commodities powerhouse Glencore Plc to breathe life into its financially embattled Zulu lithium project in Zimbabwe and relieve mounting debt pressures that threaten its survival.

The London-listed junior miner announced last week that it had signed a non-binding letter of interest with Glencore for the purchase of spodumene concentrate from the Zulu lithium/tantalum operation. The prospective deal could provide a vital financial lifeline, helping Premier settle a US$35 million debt owed to shareholder and strategic partner Canmax Technologies.

"Premier has entered into a non-binding letter of interest with Glencore International, regarding the possible purchase of spodumene concentrate," the company confirmed in a statement.

The agreement could also see Glencore assist with managing and restructuring Premier's debt, although the Swiss-headquartered commodities group has declined to comment publicly on the talks.

The crisis dates back to a 2022 offtake prepayment agreement between Premier and China-based Canmax, under which Premier was obligated to deliver 50,000 metric tonnes of spodumene annually starting May 2023. However, Premier's Zulu project has been dogged by operational failures, most notably technical issues at its spodumene concentrator, rendering it unable to meet its delivery commitments. By April 2025, the missed targets had turned into a US$35 million liability, threatening to collapse the company and straining ties with its 13% shareholder.

Premier has since reached a tentative understanding with Canmax to pursue a binding agreement with Glencore within three months — a tight deadline given Premier's ongoing operational setbacks.

"We are working towards a solution that stabilises the company and ensures long-term viability for all stakeholders," Premier said.

Investors reacted with enthusiasm to the news, with Premier's shares surging over 200 percent intraday before closing with an 80 percent gain, boosting its market valuation to £25.3 million (US$33.6 million). The rally underscores market hope for a turnaround, although analysts warn the deal remains precarious.

"A letter of interest is not a contract," cautioned Takunda Mpemba, a London-based mining analyst. "There is no guarantee this will result in a binding deal unless Premier delivers on grade, volume, and consistency."

The potential agreement comes amid a global scramble for lithium, a key component in electric vehicle (EV) batteries and renewable energy storage systems. Zimbabwe is fast emerging as a crucial supplier of hard-rock lithium, yet its mining sector continues to wrestle with infrastructure constraints and regulatory uncertainty.

"Premier's potential deal with Glencore speaks to a broader trend of strategic alliances in securing critical minerals. But execution is everything. Until the Zulu mine reliably produces concentrate, this deal remains more of a lifeline than a turnaround," said Tapiwa Chiremba, an energy economist.

Still, Premier remains optimistic, describing the Glencore engagement as a vote of confidence in the long-term value of its assets.

"This is an important development for Premier and our stakeholders and reflects confidence in the underlying potential of the Zulu project," the company said.

With a three-month window to secure a binding deal, Premier now faces a critical test. Whether it can translate investor optimism and high-stakes negotiations into a sustainable recovery remains to be seen — but the outcome could determine not just its future, but Zimbabwe's emerging role in the global battery metals race.
- the herald