Zimbabwe has eased its mandate for lithium miners to process the mineral domestically, a government official announced on Thursday, as the sector struggles with a price slump over the past year, Reuters reported.
As Africa’s leading lithium producer, Zimbabwe had previously set a March 2024 deadline for miners to present plans for producing battery-grade lithium within the country.
However, lithium prices, primarily driven by its use in battery technology, have dropped by more than 80% over the past year, largely due to overproduction in China and reduced demand for electric vehicles.
The lithium price collapse has hit companies hard, with industry giants like China’s CATL halting production at several mines, while Albemarle, the world’s largest lithium producer, initiated a second wave of cost-cutting measures and layoffs earlier this year.
In Ghana, concerns are mounting that the global price slump could threaten its inaugural lithium mining project in Ewoyaa.
Meanwhile, in Zimbabwe, lithium miners such as Sinomine Resource Group’s Bikita Minerals have also scaled back production and reduced their workforce. The situation has been worsened by Zimbabwe’s struggling infrastructure, currency instability, and inconsistent policies.
In response, Zimbabwe’s government is now adopting a more cautious approach to its plans for localising lithium processing, Deputy Mines Minister Polite Kambamura stated..
Zimbabwe has become a key player in the global lithium market over the past two years, following a surge in prices during 2021 and 2022. This boom has attracted huge interest and investment from Chinese companies, eager to capitalize on the country’s rich lithium resources.
Despite lithium spot prices plunging by nearly 90% since late 2022, as a surge in supply met weaker-than-expected demand for electric vehicles (EVs), Chinese companies remain determined to secure feedstock for their domestic refineries.
Notably, Chinese mining companies Zhejiang Huayou Cobalt Co. and Tsingshan Holding Group Co. are pushing forward with the development of a lithium deposit in partnership with a Zimbabwean state-owned company, despite the sharp decline in lithium prices.
