Chinese mining firms Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group are advancing a lithium mining project in Zimbabwe in collaboration with Kuvimba Mining House, despite significant price declines in lithium. A feasibility study is underway for a mining and processing plant at Sandawana, with anticipated investments of $250-$300 million and projected annual production of 500,000 tons of lithium concentrate. Despite current market conditions, confidence remains high about the future of lithium prices and the project’s viability.
Chinese mining companies are actively advancing the development of a lithium deposit in Zimbabwe, in collaboration with a state-owned Zimbabwean enterprise. This initiative, which includes conducting a feasibility study for the construction of a mine and processing facility at Sandawana, persists despite a significant decline in lithium prices. This partnership involves prominent Chinese firms, Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co., both of which are already engaged in lithium projects within Zimbabwe. The confirmation of this endeavor came from Trevor Barnard, the acting CEO of Kuvimba Mining House, the entity owning the asset, who previously announced the partnership in July without disclosing the involved parties. Over the past two years, Zimbabwe has established itself as a significant player in the global lithium market, especially following a price surge in 2021 and 2022, which attracted considerable investment from Chinese companies keen to exploit the nation’s abundant lithium reserves. Despite a nearly 90% drop in lithium spot prices since late 2022—due to an influx of supply coinciding with less-than-anticipated demand in the electric vehicle sector—Chinese enterprises remain steadfast in securing raw materials for their domestic processing operations. According to Mr. Barnard, Huayou and Tsingshan are poised to invest between $250 million and $300 million into the lithium mining and processing facility, which is projected to yield approximately 500,000 tons of lithium concentrate annually. He further anticipates that lithium prices will rebound gradually over the next year, with a robust recovery expected in 2026 and 2027 as the current surplus of production transitions into deficits. Barnard expressed confidence in the project’s economic viability, stating, “Our economics show that we will still be a profitable business even at the current pricing levels.” Across the continent, lithium mining and exploration are experiencing a surge in various countries, including Namibia, Mali, Ghana, and the Democratic Republic of the Congo (DRC). However, it is important to note that these projects are relatively modest when compared to the extensive developments occurring in the Americas, Australia, and Europe.
The article examines the emerging lithium mining sector in Zimbabwe, focusing on the collaboration between Chinese mining companies and a state-owned Zimbabwean firm amidst fluctuating lithium prices. The global lithium market has gained significant attention due to the growing demand for electric vehicles, leading countries rich in lithium resources, such as Zimbabwe, to become central players in this industry. The partnerships formed, alongside investments in mining infrastructure, reflect the strategic importance of lithium both for domestic needs and international markets, particularly in the face of recent price declines.
In summary, despite recent challenges posed by plummeting lithium prices, Chinese mining companies are committed to advancing lithium extraction and processing initiatives in Zimbabwe. The collaboration with Kuvimba Mining House at Sandawana signifies a strategic move to secure valuable lithium resources for use in the domestic market. The anticipated investment and future production goals underlie a confident outlook for the sector, with expectations of market recovery in the coming years.
Original Source: africa.businessinsider.com
