Chinese mining giants Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. are collaborating with Zimbabwean state-owned Kuvimba Mining House to develop a lithium deposit in Sandawana. Despite a drastic drop in lithium prices, they are investing $250 million to $300 million in a mining and processing facility, projecting an annual output of 500,000 tons of lithium concentrate. The CEOs express confidence in the project’s viability amid ongoing market changes and anticipate price recovery in the coming years.
Chinese mining corporations Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. are advancing their collaboration with a Zimbabwean state-owned enterprise to develop a lithium deposit, even in the face of significant declines in lithium prices. Both companies are already engaged in lithium projects within Zimbabwe and are currently conducting a feasibility study for a proposed mine and processing facility in Sandawana, located in the southern region of the country. This development was corroborated by the CEO of Kuvimba Mining House, which owns the rights to the asset and had initially announced the partnership in July without disclosing the identities of the partners. In recent years, Zimbabwe has emerged as a prominent participant in the global lithium market, driven by a dramatic increase in prices during 2021 and 2022. This surge attracted considerable investment and interest from Chinese entities eager to leverage the nation’s abundant lithium resources. Despite a staggering nearly 90% drop in lithium spot prices since late 2022, attributed to increased supply and subdued demand for electric vehicles, Chinese firms are pursuing strategies to secure feedstock for their domestic refining operations. Accordingly, Huayou and Tsingshan are expected to invest between $250 million and $300 million into constructing their lithium mining and processing facility, which is projected to yield approximately 500,000 tons of lithium concentrate annually, as indicated by the acting CEO of Kuvimba, Trevor Barnard. Mr. Barnard anticipates a gradual recovery in lithium prices over the forthcoming year, with a more notable rebound expected in 2026 and 2027 as current production surpluses transition to shortages. He expressed optimism regarding the project’s economic potential, asserting, “Our economics show that we will still be a profitable business even at the current pricing levels.” Lithium mining and exploration endeavors are witnessing an upsurge across various African nations, including Namibia, Mali, Ghana, and the Democratic Republic of the Congo. Nevertheless, these endeavors remain comparatively limited when juxtaposed with the multitude of projects operational in the Americas, Australia, and Europe.
The global landscape for lithium mining has evolved significantly, particularly with the recent emphasis on renewable energy sources and electric vehicles (EVs). As demand for lithium-ion batteries continues to soar, countries rich in lithium resources have become focal points for investment and development. Zimbabwe, with its untapped lithium deposits, has attracted particular interest from Chinese mining companies, who are drawn by the potential for future profitability despite current market fluctuations. The economic viability of lithium extraction remains a topic of discussion among industry experts, especially amidst declining prices. This backdrop sets the stage for understanding the implications of the collaboration between Chinese firms and Zimbabwean entities in advancing lithium projects.
In summary, the partnership between Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. with Kuvimba Mining House represents a significant investment in Zimbabwe’s lithium sector despite recent price downturns. The commitment to invest substantial capital highlights confidence in the long-term potential of lithium mining in the region. Furthermore, the anticipation of a future price recovery emphasizes the strategic foresight of these companies. As the market for lithium evolves, Zimbabwe’s role as a key player will likely expand, contributing to both its economic growth and the global lithium supply chain.
Original Source: www.newzimbabwe.com
