Zimbabwe President Emmerson Mnangagwa has said Australian lithium miner Prospect Resources' partnership with China's Zhejiang Huayou Cobalt (Huayou) to rapidly develop the Arcadia lithium mine will usher significant foreign direct investment and create a wide portfolio of high-quality battery metals projects.

In a statement last week, Prospect Resources Limited announced it was selling an 87 percent stake in Prospect Lithium Zimbabwe (Pvt) Limited, its subsidiary company that owns the Arcadia Lithium project in Zimbabwe, to Huayou for about $378 million.

Speaking on Friday at the signing ceremony of a binding agreement between Prospect and Huayou for the development of the lithium project, President Mnangagwa said he expected the investment to lift many Zimbabweans out of poverty and into prosperity.

"This is a positive development in the country's mining sector, as we will continue to march towards the attainment of a $12 billion mining sector by 2023."

"The decision by Huayou to partner with Prospect Resources is a testament of confidence in my government's policies and our economy. It also reaffirms the success of our mantra, 'Zimbabwe is open for Business' and will leapfrog our country into lithium production and value chains," he said.

With one of the largest lithium reserves in Africa, Zimbabwe was poised to become a hub for research, development, extraction and manufacturing of green energy and lithium-based solutions.

Sam Hosack, Prospect Resources managing director and CEO, said his company was delighted by the outcome of the process to find an investment partner, which generated interest from seven potential international partners.

The transaction which expected to close late during the first half of next year, is still subject to approval by Prospect Resources shareholders and regulatory authorities in both Zimbabwe and China.

Chen Xuehua, chairman of Huayou, said the acquisition of Arcadia complements his company's existing battery metal mining operations in southern Africa and represents a logical transaction for Huayou as it continued to build a new energy materials business division.

Huayou is a leading Chinese new energy materials producer listed on the Shanghai Stock Exchange. It has been operating two copper and cobalt mines in the Democratic Republic of Congo since 2007 and is investing in four nickel and cobalt projects in Indonesia.

Prospect Resources, the Perth-based lithium company, has been developing Arcadia into a flagship asset to become a compelling long-life, large-scale, hard rock open pit lithium mine, 38 kilometers east of Harare, Zimbabwe's capital. Once on stream, the lithium mine aims to export an average of 265,000 metric tons of product concentrate every year.