A Chinese company that is a leading provider of materials for lithium battery manufacturers has reportedly partnered with a South African mining firm to establish Zimbabwe’s early lithium ore processing plant. The company’s founder was also an early investor in China AmperexTechnology Co. Ltd. (CATL), the largest manufacturer in the world of lithium batteries for electric vehicles, with an estimated global market share of 34 percent.
Zimbabwe has some of the world’s largest lithium reserves, coveted by market players and governments alike seeking to secure supply chain access to a critical mineral in the future of battery manufacturing, green technology and related national security considerations. Several years ago, the Zimbabwe government expressed its ambition to fulfill 20% of global lithium demand when the industry is fully developed. Chinese companies have been very active in the country over the past decade securing assets for export back to China and establishing positive relations with President Mnangagwa.
This investment appears to be a continuation of that trend, but, importantly, it comes after the government of Zimbabwe banned exports of unprocessed mineral ores in December 2022, including lithium, as part of its national development strategy to capture additional revenue, decrease illegal exports, and spur economic development. Companies that build processing plants in the country are exempt from the regulation.
The Chinese company involved in the processing plant has existing lithium interests in Zimbabwe which could be positively impacted by its announcement to establish a lithium processing plant. In March 2022 the company acquired a 13.38% stake in Premier African Minerals Ltd., the owner of the Zulu Lithium and Tantalum Project. The Chinese company is also an owner of China’s leading lithium chemicals producer under a joint venture with one of China’s largest manufacturers of lithium-ion batteries used in electric vehicles. Demand for lithium has resulted in exponential price increases in recent years, although there are signs that supply could outpace demand in the near future.
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