Chinese mining firms, Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co., are advancing a lithium mining project in Zimbabwe in partnership with a state-owned company. Despite a substantial drop in lithium prices, they are pursuing a feasibility study for a new mine and processing facility at Sandawana. Zimbabwe’s role as a key player in the global lithium market has attracted significant investments from Chinese companies, which have plans for considerable expenditure on the project while remaining optimistic about future lithium price increases.
Chinese mining entities, Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co., are advancing with the development of a lithium deposit in collaboration with a Zimbabwean state-owned entity, despite the recent sharp downturn in lithium prices. These companies, already engaged in other lithium initiatives within Zimbabwe, are currently conducting a feasibility study aimed at establishing a mine and processing facility at Sandawana, located in the southern region of the country, as reported by Bloomberg. The chief executive officer of Kuvimba Mining House, the entity that possesses this asset and previously disclosed the partnership in July without naming the involved parties, affirmed this development. Over the past two years, Zimbabwe has emerged as a significant player in the global lithium market, fueled by a price surge experienced during 2021 and 2022. This boom has attracted considerable investment from Chinese firms eager to exploit the nation’s abundant lithium resources. In light of lithium spot prices plummeting by nearly 90% since late 2022, due to an oversupply meeting tepid demand for electric vehicles, Chinese companies remain resolute in their quest to secure raw materials for their domestic refineries. The planned investment for the lithium mining and processing facility by Huayou and Tsingshan is estimated to range between $250 million and $300 million, with projections for an output of approximately 500,000 tons of lithium concentrate annually, according to the acting CEO of Kuvimba, Trevor Barnard. Mr. Barnard expressed optimism regarding the future of lithium prices, forecasting a gradual increase over the next year, with a robust recovery anticipated in 2026 and 2027 as current production surpluses transition into deficits. Despite prevailing low price conditions, Mr. Barnard exhibited confidence in the financial viability of the project, stating, “Our economics show that we will still be a profitable business even at the current pricing levels.”
The significance of lithium in the contemporary landscape arises from its integral role in the production of rechargeable batteries, particularly for electric vehicles (EVs). With the increasing demand for EVs, countries with abundant lithium resources, such as Zimbabwe, have become focal points for investment from major mining firms. The surge in lithium prices observed in 2021 and 2022 positioned Zimbabwe favorably within the global lithium market, fostering a climate of optimism and interest among investors, particularly those from China. However, the recent substantial decline in lithium prices presents a complex challenge, compelling companies to reassess feasibility and economic viability yet sparking commitment to resource development. Chinese investments in Zimbabwean lithium mining reflect broader trends in global resource management and energy transition strategies.
In summary, the ongoing collaboration between Chinese mining companies and a Zimbabwean state-owned firm exemplifies the international interest in lithium resources despite recent market fluctuations. While current lithium prices have drastically decreased, projections for future price recovery offer a promising outlook for the development initiatives in Zimbabwe. The commitment to invest significantly into the lithium mining and processing infrastructure underscores the strategic importance of lithium in the supply chain for electric vehicle production. The leadership’s confidence in the project’s profitability amidst volatile market conditions marks a pivotal moment in Zimbabwe’s mining sector.
Original Source: africa.businessinsider.com
