Chinese mining companies are forging ahead with a lithium mining project in Zimbabwe, partnering with a state-owned company amidst declining lithium prices. The feasibility study for a mine and processing facility at Sandawana signifies Zimbabwe’s growing importance in the global lithium market, supported by substantial Chinese investments despite recent price drops. A projected investment of up to $300 million aims to produce significant lithium concentrate, reflecting optimism for future price recoveries.
Chinese mining companies, notably Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co., are advancing their plans to develop a lithium deposit in Zimbabwe, collaborating with a Zimbabwean state-owned entity. This initiative is occurring despite a significant downturn in lithium prices. The companies have initiated a feasibility study to assess the establishment of a mining and processing facility at Sandawana, located in Zimbabwe’s southern region. The development became publicly acknowledged through the Chief Executive Officer of Kuvimba Mining House, who confirmed the partnerships after an announcement in July that initially omitted the companies’ identities. Zimbabwe has emerged as a crucial contributor to the global lithium supply, experiencing a boom in investment from Chinese firms following the price surge in the lithium market during 2021 and 2022. Despite lithium spot prices having plummeted nearly 90% since late 2022 due to an increase in supply coinciding with reduced demand for electric vehicles (EVs), there remains a steadfast commitment from Chinese mining companies to secure raw materials for their domestic processing capabilities. Both Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. are poised to invest between $250 million and $300 million to erect a lithium mining and processing facility estimated to yield approximately 500,000 tons of lithium concentrate per annum, as stated by Trevor Barnard, the acting CEO of Kuvimba Mining House. Barnard remains optimistic about the project’s economic viability, indicating an expectation of a gradual rebound in lithium prices within the next year, with significant recovery anticipated around 2026 and 2027 as current production surpluses transition into deficits. Moreover, while active lithium mining and exploration projects are proliferating across the African continent in nations such as Namibia, Mali, Ghana, and the Democratic Republic of the Congo, these remain modest compared to the scale of similar projects developed in regions such as the Americas, Australia, and Europe.
The article delves into the recent partnership between Chinese mining giants and a Zimbabwean state-owned company regarding a lithium mining project in Zimbabwe. This collaboration has emerged amidst declining lithium prices, which have seen a dramatic reduction of up to 90% since late 2022. Nevertheless, the interest from Chinese companies highlights a long-term strategic vision to secure essential materials for lithium processing in China. The focus is on a specific site, Sandawana, where these firms are performing feasibility studies to establish mining and processing operations. This positioning is crucial as Zimbabwe has become increasingly significant in the global lithium supply chain, predominantly driven by previous price surges and investments from foreign entities, particularly from China. The discussion also touches upon the broader context of lithium mining activities across Africa and contrasts them with developed mining sectors in other regions.
In summary, the collaboration among Chinese mining firms and Zimbabwean state-owned entities signifies a proactive approach to lithium mining in Zimbabwe despite current market challenges. The commitment to invest substantial resources into developing the Sandawana site reflects a long-term strategic outlook within a volatile market. While short-term fluctuations in lithium prices present hurdles, the anticipated recovery of the lithium market over the coming years underlies the confidence these companies exhibit regarding the viability of their investments. Zimbabwe’s role in the lithium market continues to evolve, positioning the country as a pivotal player alongside ongoing global demand for lithium, particularly in the EV sector.
Original Source: africa.businessinsider.com
