Zimbabwe, Africa’s top lithium producer, has ordered all lithium miners in the country to submit plans for local production of battery-grade lithium by March 2024, in a bid to benefit from the growing demand for the clean energy mineral. The move has sparked mixed reactions from the mining industry, as some see it as a way to boost value addition and create jobs, while others fear it could hamper investment and production.
Lithium, used in electric vehicle batteries and to store renewable energy, has become one of Zimbabwe’s most lucrative mineral exports, earning $209 million in the first nine months of 2023, up from $132 million in the same period in 2022. The country has some of the world’s largest hard-rock lithium reserves, estimated at over 23 million tonnes, and has attracted over $1 billion of investment from Chinese miners such as Zhejiang Huayou Cobalt, Sinomine Resource Group, Chengxin Lithium Group, Yahua Group, and Canmax Technologies.
However, most of these miners only produce lithium concentrates, which are then exported to China for further processing into battery-grade lithium carbonate or hydroxide. Zimbabwe wants to change this situation by developing its own lithium refineries, which could potentially increase the value of its exports and create more revenue for the government.
Finance Minister Mthuli Ncube said in his 2024 national budget presentation that the government does not regard the current production of concentrates by miners in the country as beneficiation, a process in which raw minerals are improved to add value. He added that no new licenses would be granted to prospective lithium miners without approved beneficiation plans.
The minister’s announcement has been welcomed by some stakeholders, such as the Zimbabwe Environmental Law Association (ZELA), which said it was a positive step towards ensuring that the country benefits from its natural resources. ZELA also urged the government to ensure that the lithium refineries are environmentally and socially responsible and that they adhere to international standards and best practices.
However, some miners have expressed concerns over the feasibility and viability of building lithium refineries in Zimbabwe, citing challenges such as infrastructure deficiencies, unreliable power supply, high costs of inputs, and lack of skilled labor. Some have also argued that the global market for battery-grade lithium is already saturated and that Zimbabwe should focus on producing high-quality concentrates that can fetch premium prices.
Huayou, which bought Arcadia mine just outside Harare in 2022 and built a concentrator that started production earlier this year, said it would explore local production of lithium sulfate “only when the construction and economic conditions are right”. Huayou has previously said that Zimbabwe lacks reliable renewable energy, natural gas, sulphuric acid, and other key inputs needed to produce battery-grade lithium.
Sinomine, which recently commissioned a $300 million spodumene concentrator at its Bikita mine in southern Zimbabwe, said it had started feasibility studies on producing battery-grade lithium in the country, but did not give a timeline or a budget for the project.
Zimbabwe is not the only country in Africa that is eyeing lithium beneficiation, as others such as Namibia, Mali, and Ghana have also announced plans to develop their own lithium refineries. However, analysts have warned that these countries will face stiff competition from established producers such as Australia, Chile, and China, as well as emerging players such as the United States and Europe, which are also ramping up their lithium production and refining capacities to meet their own domestic demand and reduce their reliance on imports.
Zimbabwe’s lithium refinery ambitions will therefore depend on its ability to overcome the technical, financial, and regulatory hurdles, as well as to secure a stable and competitive market for its products. If successful, the country could position itself as a key player in the global lithium value chain, and reap the benefits of the green energy transition.
Source: Reuters
