KEY POINTS
- Chinese firms Huayou and Tsingshan are developing Zimbabwe’s largest lithium mine at Sandawana.
- The $250-$300 million project is expected to produce 500,000 tons of lithium concentrate annually.
- Zimbabwe is emerging as a key player in global lithium supply.
Chinese miners Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. are moving forward with a lithium project in partnership with a Zimbabwean state company, despite falling lithium prices.
The two firms, which already operate lithium projects in Zimbabwe, plan to complete a study before constructing a mine and processing plant at Sandawana in the country’s south, according to Trevor Barnard, acting CEO of Kuvimba Mining House.
Lithium prices fall, but Chinese firms push forward
Lithium spot prices have fallen nearly 90% since late 2022, leading to production shutdowns and delays globally. However, Chinese companies are still seeking supply to feed refineries in China.
“Huayou and Tsingshan’s construction plans for Sandawana are estimated to cost between $250 million and $300 million, with an expected annual production of around 500,000 tons of lithium concentrate,” Barnard said.
Barnard predicted lithium prices would recover gradually over the next year and rebound strongly by 2026 or 2027, as production surpluses give way to deficits. “Our economics show that we will still be a profitable business even at current pricing levels,” he said.
$300M lithium project to boost Zimbabwe’s global supply share
Zimbabwe has become a significant lithium producer in the last two years following a price surge in 2021 and 2022 that spurred a wave of investments from Chinese companies, including Chengxin Lithium Group Co. Ltd. and Sinomine Resource Group Co. Ltd.
A Huayou subsidiary has invested more than $700 million to acquire and develop the Arcadia mine, while Tsingshan is working on the smaller Gwanda project.
Instead of owning equity in the Sandawana project, Barnard said Huayou and Tsingshan have agreed to transfer the asset back to Kuvimba after a minimum of five years and once the loan that will finance the project is repaid.
Zimbabwe is expected to account for about 10% of global lithium supply this year, according to CRU Group.
Kuvimba’s ambitious plans for Zimbabwe’s largest lithium producer
According to a report by Mining.com, Kuvimba aims to complete the construction of the plant, which will become Zimbabwe’s largest lithium producer, by the end of next year.
Sandawana was previously the site of an emerald mine operated by Rio Tinto Plc for several decades last century. More recently, Zimbabwe explored iron ore and tantalum at the site before shifting its focus to lithium.
Kuvimba has divided Sandawana into three blocks and is in talks with potential investors on two earlier-stage projects that require further exploration. These include discussions with a company owned by British businessman Algy Cluff, who helped pioneer North Sea oil and gas development and has managed mining projects in African countries, including Zimbabwe.
